Cover
Cover - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38629 | |
Entity Registrant Name | EQUITRANS MIDSTREAM CORPORATION | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 83-0516635 | |
Entity Address, Address Line One | 2200 Energy Drive | |
Entity Address, City or Town | Canonsburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 15317 | |
City Area Code | 724 | |
Local Phone Number | 271-7600 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | ETRN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Small Business Entity | false | |
Entity Shell Company | false | |
Entity Common Units, Unit Outstanding (in shares) | 229,330 | |
Entity Central Index Key | 0001747009 | |
Amendment Flag | false | |
Current Fiscal Year End | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Statements of Consolidated Comp
Statements of Consolidated Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Income Statement [Abstract] | |||
Operating revenues | [1] | $ 453,113 | $ 389,782 |
Operating expenses: | |||
Operating and maintenance | [2] | 38,422 | 27,883 |
Selling, general and administrative | [2] | 29,739 | 32,178 |
Separation and other transaction costs | 11,360 | 8,782 | |
Depreciation | 61,348 | 50,511 | |
Amortization of intangible assets | 14,581 | 10,387 | |
Impairments of long-lived assets | [3],[4] | 55,581 | 0 |
Total operating expenses | 211,031 | 129,741 | |
Operating income | 242,082 | 260,041 | |
Equity income | [5],[6] | 54,072 | 31,063 |
Other income (e) | [7] | 4,163 | 1,861 |
Loss on early extinguishment of debt | 24,864 | 0 | |
Net interest expense | [8] | 66,754 | 60,949 |
Income before income taxes | 208,699 | 232,016 | |
Income tax expense | 19,139 | 32,450 | |
Net income | 189,560 | 199,566 | |
Net income attributable to noncontrolling interests | 119,828 | 143,267 | |
Net income attributable to Equitrans Midstream | $ 69,732 | $ 56,299 | |
Earnings per share of common stock attributable to Equitrans Midstream - basic (in dollars per share) | [9] | $ 0.28 | $ 0.22 |
Earnings per share of common stock attributable to Equitrans Midstream - diluted (in dollars per share) | [9] | $ 0.28 | $ 0.22 |
Weighted average common stock outstanding - basic (in shares) | 248,591 | 254,776 | |
Weighted average common stock outstanding - diluted (in shares) | 248,591 | 254,827 | |
Statement of comprehensive income (loss): | |||
Net income | $ 189,560 | $ 199,566 | |
Other comprehensive income (loss), net of tax: | |||
Pension and other post-retirement benefits liability adjustment, net of tax expense of $10 and $8 | 30 | (295) | |
Other comprehensive income (loss) | 30 | (295) | |
Comprehensive income | 189,590 | 199,271 | |
Less: Comprehensive income attributable to noncontrolling interests | 119,828 | 143,267 | |
Comprehensive income attributable to Equitrans Midstream | $ 69,762 | $ 56,004 | |
Dividends declared per common share (in dollars per share) | $ 0.15 | $ 0.45 | |
[1] | Operating revenues included related party revenues from EQT of approximately $303.8 million and $284.5 million for the three months ended March 31, 2020 and 2019 , respectively. See Note 7 . | ||
[2] | Operating and maintenance expense included charges to EQT of approximately $2.4 million for the three months ended March 31, 2019 . Selling, general and administrative expense included charges from EQT of approximately $1.0 million for the three months ended March 31, 2019 . See Notes 1 and 7 . | ||
[3] | See Note 4 for disclosure regarding impairments of long-lived assets. | ||
[4] | See Note 4 for disclosure regarding impairments of long-lived assets. | ||
[5] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||
[6] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||
[7] | See Note 10 for disclosures regarding derivative instruments. | ||
[8] | Net interest expense included interest income on the Preferred Interest in EES of approximately $1.5 million and $1.6 million for the three months ended March 31, 2020 and 2019 , respectively. | ||
[9] | See Note 11 for disclosure regarding the Company's calculation of net income per share of common stock (basic and diluted). |
Statements of Consolidated Co_2
Statements of Consolidated Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Pension and other post-retirement benefits liability adjustment, tax expense | $ 10 | $ 8 | |
Operating and maintenance expense | [1] | 38,422 | 27,883 |
Selling, general and administrative expense | [1] | 29,739 | 32,178 |
EQT Corporation and Subsidiaries | |||
Revenue from related party | 303,800 | 284,500 | |
Operating and maintenance expense | 2,400 | ||
Selling, general and administrative expense | 1,000 | ||
EES | |||
Interest income | $ 1,500 | $ 1,600 | |
[1] | Operating and maintenance expense included charges to EQT of approximately $2.4 million for the three months ended March 31, 2019 . Selling, general and administrative expense included charges from EQT of approximately $1.0 million for the three months ended March 31, 2019 . See Notes 1 and 7 . |
Statements of Consolidated Cash
Statements of Consolidated Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |||
Cash flows from operating activities: | |||||
Net income | $ 189,560 | $ 199,566 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | 61,348 | 50,511 | |||
Amortization of intangible assets | 14,581 | 10,387 | |||
Deferred income taxes | 18,710 | 32,450 | |||
Impairments of long-lived assets | [1],[2] | 55,581 | 0 | ||
Equity income | [3],[4] | (54,072) | (31,063) | ||
Other income | (4,306) | (1,997) | |||
Loss on early extinguishment of debt | 24,864 | 0 | |||
Share-based compensation plans | 4,541 | 1,108 | |||
Changes in other assets and liabilities: | |||||
Accounts receivable | (998) | (9,989) | |||
Accounts payable | 6,067 | (47,827) | |||
Accrued interest | (28,793) | (38,828) | |||
Other assets and other liabilities | (37,780) | (42,117) | |||
Net cash provided by operating activities | 249,303 | 122,201 | |||
Cash flows from investing activities: | |||||
Capital expenditures | (152,392) | $ (8,900) | (208,966) | ||
Capital contributions to the MVP Joint Venture | (45,150) | (144,763) | |||
Principal payments received on the Preferred Interest | 1,225 | 1,141 | |||
Net cash used in investing activities | (196,317) | (352,588) | |||
Cash flows from financing activities: | |||||
Proceeds from revolving credit facility borrowings | 1,170,000 | 684,000 | |||
Payments on revolving credit facility borrowings | (350,000) | (230,500) | |||
Payment for retirement of long-term debt | (594,000) | 0 | |||
Payments for credit facility amendment fees | (2,740) | (1,500) | |||
Distributions paid to noncontrolling interest unitholders | (96,526) | (94,030) | |||
Distributions paid to EQM Series A Preferred unitholders | (25,501) | 0 | |||
Dividends paid | (114,254) | (104,251) | |||
Cash Shares and Cash Amount (defined in Note 6) | (52,323) | 0 | |||
Purchase of EQGP common units | 0 | (238,455) | |||
Net cash (used in) provided by financing activities | (65,344) | 15,264 | |||
Net change in cash, restricted cash and cash equivalents | (12,358) | (215,123) | |||
Cash, restricted cash and cash equivalents at beginning of period | 88,322 | $ 79,049 | [5] | 294,172 | |
Cash, restricted cash and cash equivalents at end of period | [5] | 75,964 | 79,049 | ||
Cash paid during the period for: | |||||
Interest, net of amount capitalized | 94,343 | 98,470 | |||
Non-cash activity during the period for: | |||||
Contract liability | $ 128,314 | $ 0 | |||
[1] | See Note 4 for disclosure regarding impairments of long-lived assets. | ||||
[2] | See Note 4 for disclosure regarding impairments of long-lived assets. | ||||
[3] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||||
[4] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||||
[5] | Includes $29.0 million of cash and cash equivalents and $50.0 million of cash escrowed as of March 31, 2019 associated with the Bolt-on Acquisition (as defined in Note 3 ). |
Statements of Consolidated Ca_2
Statements of Consolidated Cash Flows (Unaudited) Statements of Consolidated Cash Flows (Unaudited) (Parenthetical) $ in Thousands | Mar. 31, 2019USD ($) |
Bolt-on Acquisition | |
Cash and cash equivalents | $ 29,000 |
Cash escrowed | $ 50,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 75,964 | $ 88,322 | |
Accounts receivable (net of allowance for credit losses of $3,053 and allowance for doubtful accounts of $285 as of March 31, 2020 and December 31, 2019, respectively) (a)(b) | [1] | 253,161 | 255,344 |
Other current assets | 39,308 | 31,546 | |
Total current assets | 368,433 | 375,212 | |
Property, plant and equipment | 8,573,862 | 8,583,124 | |
Less: accumulated depreciation | (823,100) | (859,157) | |
Net property, plant and equipment | 7,750,762 | 7,723,967 | |
Investment in unconsolidated entity | 2,465,827 | 2,324,108 | |
Goodwill | 486,698 | 486,698 | |
Net intangible assets | 765,205 | 797,439 | |
Deferred income taxes | 45,396 | 90,597 | |
Other assets | 307,356 | 243,688 | |
Total assets | 12,189,677 | 12,041,709 | |
Current liabilities: | |||
Current portion of long-term debt | 0 | 6,000 | |
Accounts payable | 109,151 | 128,114 | |
Capital contributions payable to the MVP Joint Venture | 87,647 | 45,150 | |
Accrued interest | 44,662 | 73,455 | |
Accrued liabilities | 51,677 | 83,238 | |
Total current liabilities | 293,137 | 335,957 | |
Revolving credit facility borrowings | [2] | 1,722,500 | 902,500 |
EQM long-term debt | 4,860,096 | 4,859,499 | |
Long-term debt | 0 | 562,484 | |
Contract liability | [3] | 173,005 | 0 |
Regulatory and other long-term liabilities | 96,621 | 99,189 | |
Total liabilities | 7,145,359 | 6,759,629 | |
Equity: | |||
Common stock, no par value, 229,352 and 254,745 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 1,297,304 | 1,292,804 | |
Retained deficit | (858,440) | (618,062) | |
Accumulated other comprehensive loss | (1,996) | (2,026) | |
Total common shareholders' equity | 436,868 | 672,716 | |
Noncontrolling interests | 4,607,450 | 4,609,364 | |
Total shareholders' equity | 5,044,318 | 5,282,080 | |
Total liabilities and shareholders' equity | $ 12,189,677 | $ 12,041,709 | |
[1] | Accounts receivable as of March 31, 2020 and December 31, 2019 included approximately $183.4 million and $175.2 million , respectively, of related party accounts receivable from EQT. | ||
[2] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. | ||
[3] | See Note 6 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable, related parties | $ 183,400,000 | $ 175,200,000 | |
Revolving credit facility borrowings | [1] | 1,722,500,000 | 902,500,000 |
Contract liability | [2] | 173,005,000 | 0 |
Derivative instrument, at fair value | 55,700,000 | ||
Accounts receivable, for doubtful accounts | $ 3,053,000 | $ 285,000 | |
Common stock, shares issued (in shares) | 229,352 | 254,745 | |
Common stock, shares outstanding (in shares) | 229,352 | 254,745 | |
EQM Midstream Partners, LP | Revolving Credit Facility | EQM Credit Facility | |||
Revolving credit facility borrowings | $ 235,000,000 | $ 1,000,000 | |
Borrowings outstanding | 1,430,000,000 | 610,000,000 | |
Eureka Midstream, LLC | |||
Borrowings outstanding | 293,000,000 | ||
Line of credit | Equitrans Midstream Credit Facility | |||
Borrowings outstanding | 0 | ||
Line of credit | Eureka Midstream, LLC | Eureka Credit Facility | |||
Borrowings outstanding | $ 293,000,000 | $ 293,000,000 | |
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. | ||
[2] | See Note 6 |
Statements of Consolidated Equi
Statements of Consolidated Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Beginning balance at Dec. 31, 2018 | $ 5,259,633 | $ 425,370 | $ 33,932 | $ (1,509) | $ 4,801,840 | ||
Beginning balance (in shares) at Dec. 31, 2018 | 254,271 | ||||||
Increase (Decrease) in Partners' Capital | |||||||
Net income | 199,566 | 56,299 | 143,267 | ||||
Pension and other post-retirement benefits liability adjustment, net of tax expense | 21 | 316 | (295) | ||||
Dividends | (104,251) | (104,251) | |||||
Share-based compensation plans | 1,108 | $ 853 | 255 | ||||
Share-based compensation plans, net (in shares) | 413 | ||||||
Distributions paid to noncontrolling interest unitholders | (94,030) | (94,030) | |||||
Shares repurchased | (238,455) | $ (38,648) | (199,807) | ||||
Net changes in ownership of consolidated entities (See Note 2) | (346,543) | 991,098 | (1,337,641) | ||||
Ending balance at Mar. 31, 2019 | 4,677,049 | $ 1,378,673 | (13,704) | (1,804) | 3,313,884 | ||
Ending balance (in shares) at Mar. 31, 2019 | 254,684 | ||||||
Beginning balance at Dec. 31, 2019 | $ 5,282,080 | $ (3,718) | $ 1,292,804 | (618,062) | $ (3,718) | (2,026) | 4,609,364 |
Beginning balance (in shares) at Dec. 31, 2019 | 254,745 | 254,745 | |||||
Increase (Decrease) in Partners' Capital | |||||||
Net income | $ 189,560 | 69,732 | 119,828 | ||||
Pension and other post-retirement benefits liability adjustment, net of tax expense | 30 | 30 | |||||
Dividends | (115,400) | (115,400) | |||||
Dividends (shares) | (178) | ||||||
Share-based compensation plans | 4,785 | $ 4,500 | 285 | ||||
Share-based compensation plans, net (in shares) | 85 | ||||||
Distributions paid to noncontrolling interest unitholders | (96,526) | (96,526) | |||||
Distributions paid to holders of EQM Series A Preferred Units ($1.0364 per Series A Preferred Unit (as defined in Note 1)) | (25,501) | (25,501) | |||||
Shares repurchased | (190,992) | (190,992) | |||||
Purchase of treasury shares from EQT (in shares) | (25,300) | ||||||
Ending balance at Mar. 31, 2020 | $ 5,044,318 | $ 1,297,304 | $ (858,440) | $ (1,996) | $ 4,607,450 | ||
Ending balance (in shares) at Mar. 31, 2020 | 229,352 | 229,352 |
Statements of Consolidated Eq_2
Statements of Consolidated Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pension and other post-retirement benefits liability adjustment, tax expense | $ 10 | $ 8 |
Dividends (in dollars per share) | $ 0.45 | $ 0.41 |
EQM Midstream Partners, LP | ||
Cash distributions declared (in dollars per unit) | $ 1.13 | |
Series A Preferred Units | EQM Midstream Partners, LP | ||
Cash distributions declared (in dollars per unit) | $ 1.0364 |
Financial Statements
Financial Statements | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statements | Financial Statements Organization. On November 12, 2018, Equitrans Midstream Corporation (the Company or Equitrans Midstream), EQT and, for certain limited purposes, EQT Production Company, a wholly owned subsidiary of EQT, entered into a Separation and Distribution Agreement (the Separation and Distribution Agreement), pursuant to which, among other things, EQT effected the Separation, including the transfer of certain assets and liabilities to Equitrans Midstream, and distributed 80.1% of the then outstanding shares of common stock, no par value, of Equitrans Midstream (Equitrans Midstream common stock) to EQT shareholders of record as of the close of business on November 1, 2018 (the Distribution). The Distribution was effective at 11:59 p.m., Eastern Time, on the Separation Date. As part of the Separation, EQT retained the remaining 19.9% of the outstanding shares in Equitrans Midstream. EQM Merger. On February 26, 2020, the Company, EQM LP Corporation, a wholly owned subsidiary of the Company (EQM LP), LS Merger Sub, LLC, a wholly owned subsidiary of EQM LP (Merger Sub), EQM, and EQGP Services, LLC, the general partner of EQM (the EQM General Partner), entered into an Agreement and Plan of Merger (the EQM Merger Agreement), pursuant to which Merger Sub will merge with and into EQM (the EQM Merger), with EQM continuing and surviving as a wholly owned subsidiary of the Company following the EQM Merger. Following the EQM Merger, EQM will no longer be a publicly traded entity. The Company expects the EQM Merger to close in June 2020, subject to customary closing conditions, including approvals of EQM's limited partners and the Company's shareholders. See Note 3 for further information on the EQM Merger. Preferred Restructuring Agreement. In addition, on February 26, 2020, the Company and EQM entered into a Preferred Restructuring Agreement (the Restructuring Agreement) with all of the holders of Series A Perpetual Convertible Preferred Units representing limited partner interests in EQM (such units, Series A Preferred Units and, such investors, collectively, the Investors), pursuant to which the parties thereto agreed that: (i) EQM will redeem $600 million aggregate principal amount of the Investors' Series A Preferred Units issued and outstanding immediately prior to the Restructuring Closing (as defined in Note 2 ) for cash at 101% of the Series A Preferred Unit Purchase Price (as defined in Note 2 ) plus any accrued and unpaid distribution amounts and partial period distribution amounts, and (ii) after giving effect to such redemption, each remaining issued and outstanding Series A Preferred Unit will be exchanged for 2.44 shares of a newly authorized and created series of preferred stock, without par value, of Equitrans Midstream, convertible into Equitrans Midstream common stock (the Equitrans Midstream Preferred Shares) on a one for one basis (the Equitrans Midstream Private Placement), in each case, in connection with the occurrence of the “Series A Change of Control” (as defined in the Fourth Amended and Restated Agreement of Limited Partnership of EQM (as amended, the EQM Partnership Agreement)) that will occur upon the closing of the EQM Merger (collectively, the Restructuring). The Restructuring is expected to close substantially concurrent with the closing of the EQM Merger, subject to the delivery of certain closing deliverables and certain closing conditions. See Note 2 for further information on the Restructuring Agreement. Basis of Presentation. References in these financial statements to Equitrans Midstream or the Company refer collectively to Equitrans Midstream Corporation and, as applicable, its consolidated subsidiaries for all periods presented. The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal, recurring adjustments, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of the Company as of March 31, 2020 and December 31, 2019 , the results of its operations and equity for the three months ended March 31, 2020 and 2019 and its cash flows for the three months ended March 31, 2020 and 2019 . The consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , which includes all disclosures required by GAAP. Due to the seasonal nature of EQM's utility customer contracts, the interim statements for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . For further information, refer to the Company's annual consolidated financial statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this standard eliminated the probable initial recognition threshold in then current GAAP, and, in its place, requires an entity to recognize its current estimate of all expected credit losses. The amendments affected loans, debt securities, trade receivables, contract assets, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of the standard that have the contractual right to receive cash. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326). The update provides entities with targeted transition relief that is intended to increase comparability of financial statement information for some entities that otherwise would have measured similar financial instruments using different measurement methodologies. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The update clarifies and addresses stakeholders' specific issues in ASU 2016-13. The Company adopted the standard on January 1, 2020, using the modified retrospective method for all financial assets recorded at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company's current expected credit loss (CECL) methodology considers risks of collection based on a customer’s current credit status. The standard requires an entity to assess whether financial assets share similar risk characteristics and, if so, group such assets in a pool. Customer balances are aggregated for evaluation based on their credit risk rating, which takes into account changes in economic factors that impact a customer’s ability to meet its financial obligations. The Company's CECL methodology assigns a reserve, even if remote, to each customer based on credit risk. The table below summarizes the changes in the allowance for credit losses by outstanding receivable for the three months ended March 31, 2020 : Accounts Receivable Contract Asset (a) Preferred Interest in EES (b) Total Balance at December 31, 2019 $ (285 ) $ — $ — $ (285 ) Adoption of Topic 326 (2,708 ) — (1,010 ) (3,718 ) Provision for expected credit losses (60 ) (116 ) (11 ) (187 ) Balance at March 31, 2020 $ (3,053 ) $ (116 ) $ (1,021 ) $ (4,190 ) (a) Included in other current assets in the consolidated balance sheets. (b) Included in other assets in the consolidated balance sheets. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes to the hierarchy associated with Level 1, 2 and 3 fair value measurements and the related disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2020. The adoption of this standard did not have an impact on the Company's financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company early-adopted the standard in the first quarter of 2020 with no significant effect on its financial statements or related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) , which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Amended EQM Credit Facility, the Amended 2019 EQM Term Loan Agreement and the Eureka Credit Facility, which use the London Inter-Bank Offered Rate (LIBOR) as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
Investments in Consolidated, No
Investments in Consolidated, Non-Wholly-Owed Entities | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Investments in Consolidated, Non-Wholly-Owed Entities | Investments in Consolidated, Non-Wholly Owned Entities Investment in EQGP EQGP Unit Purchases . On December 31, 2018, the Company closed on the acquisition of an aggregate of 14,560,281 common units representing limited partner interests in EQGP (EQGP common units) pursuant to certain unit purchase agreements with funds managed by Neuberger Berman Investment Adviser LP, funds managed by Goldman Sachs Asset Management, L.P., funds managed by Cushing Asset Management, LP, funds managed by Kayne Anderson Capital Advisors, L.P., and ZP Energy Fund, L.P. (the Initial Unit Purchase Closing) for an aggregate purchase price of $291.2 million . On January 2, 2019 and January 3, 2019, the Company closed on the acquisition of an additional 804,140 EQGP common units purchased pursuant for an aggregate purchase price of $16.1 million (together with the Initial Unit Purchase Closing on December 31, 2018, the EQGP Unit Purchases). Limited Call Right. Following the Initial Unit Purchase Closing, on December 31, 2018, the Company exercised a limited call right under EQGP's partnership agreement pursuant to which, on January 10, 2019, the Company closed on the acquisition of the remaining 11,097,287 outstanding EQGP common units not owned by the Company or its affiliates for an aggregate purchase price of $221.9 million (such acquisition, together with the EQGP Unit Purchases, the EQGP Buyout), and EQGP became a wholly owned subsidiary of the Company. In connection with the completion of the EQGP Buyout on January 10, 2019, certain non-employee members of the Board of Directors of EQGP's general partner at the time stepped down from their roles and were paid $20.00 for each EQGP phantom unit that they held, which was the same purchase price paid by the Company for the units purchased in the EQGP Buyout. The total amount in the aggregate was 29,829 EQGP phantom units, including accrued distributions. Termination of the EQGP Omnibus Agreement and EQGP Working Capital Facility. On January 10, 2019, in connection with the completion of the EQGP Buyout, EQGP's omnibus agreement with Equitrans Midstream and certain other parties and EQGP's $20 million working capital facility with the Company (the EQGP Working Capital Facility) were terminated. In connection with the termination of the EQGP Working Capital Facility, the Company agreed that all loans and other amounts outstanding and all other obligations of EQGP to the Company under the EQGP Working Capital Facility were deemed forgiven, satisfied, discharged and paid in full. Investment in EQM EQM IDR Transaction . On February 22, 2019, Equitrans Midstream completed a simplification transaction pursuant to that certain Agreement and Plan of Merger, dated as of February 13, 2019, by and among Equitrans Midstream and certain related parties, pursuant to which, among other things, (i) Equitrans Merger Sub, LP merged with and into EQGP (the IDR Merger) with EQGP continuing as the surviving limited partnership and a wholly owned subsidiary of EQM, and (ii) each of (a) the IDRs in EQM, (b) the economic portion of the general partner interest in EQM and (c) the issued and outstanding common units representing limited partner interest in EQGP were canceled, and, as consideration for such cancellation, certain affiliates of the Company received on a pro rata basis 80,000,000 newly-issued EQM common units and 7,000,000 newly-issued Class B units, both representing limited partner interests in EQM (EQM common units and Class B units, respectively), and the EQM General Partner retained the non-economic general partner interest in EQM (such transactions, collectively, the EQM IDR Transaction). Additionally, as part of the EQM IDR Transaction, 21,811,643 EQM common units held by EQGP were canceled and 21,811,643 EQM common units were issued pro rata to certain subsidiaries of Equitrans Midstream. As a result of the EQM IDR Transaction, the EQM General Partner replaced EQM Midstream Services, LLC as the new general partner of EQM. The Class B units are substantially similar in all respects to EQM's common units, except that the Class B units are not entitled to receive distributions of available cash until the applicable Class B unit conversion date (or, if earlier, a change of control). The Class B units are divided into three tranches, with the first tranche of 2,500,000 Class B units becoming convertible at the holder's option into EQM common units on April 1, 2021, the second tranche of 2,500,000 Class B units becoming convertible on April 1, 2022, and the third tranche of 2,000,000 Class B units becoming convertible on April 1, 2023 (each, a Class B unit conversion date). Additionally, the Class B units will become convertible at the holder's option into EQM common units immediately before a change of control of EQM. After the applicable Class B unit conversion date (or, if earlier, a change of control), whether or not such Class B units have been converted into EQM common units, the Class B units will participate pro rata with the EQM common units in distributions of available cash. The holders of Class B units vote together with the holders of EQM common units as a single class, except that Class B units owned by the general partner of EQM and its affiliates are excluded from voting if EQM common units owned by such parties are excluded from voting. Holders of Class B units are entitled to vote as a separate class on any matter that adversely affects the rights or preferences of the Class B units in relation to other classes of EQM partnership interests in any material respect or as required by law. After giving effect to the EQM IDR Transaction, including the issuance of Class B units, Equitrans Gathering Holdings, LLC (Equitrans Gathering Holdings), EQM GP Corporation (EQM GP Corp) and Equitrans Midstream Holdings, LLC (EMH), each a wholly owned subsidiary of Equitrans Midstream, held 89,505,616 , 89,536 and 27,650,303 EQM common units, respectively. Additionally, Equitrans Gathering Holdings, EQM GP Corp and EMH held 6,153,907 , 6,155 and 839,938 Class B units, respectively. As of March 31, 2020 , the Company, through such subsidiaries, owned 117,245,455 EQM common units and 7,000,000 Class B units (collectively representing a 59.9% limited partner interest in EQM, excluding the Series A Preferred Units) and the entire non-economic general partner interest in EQM, while the public owned a 40.1% limited partner interest in EQM (excluding the Series A Preferred Units). During the first quarter of 2019, as a result of the EQM IDR Transaction, the Company recorded, in the aggregate, a $991.1 million increase of common stock, no par value, a decrease in noncontrolling interest of $1.3 billion and a decrease in deferred tax asset of $346.5 million . EQM Merger. See Note 3 for a discussion regarding the EQM Merger. EQM Series A Preferred Units. On March 13 , 2019, EQM entered into a Convertible Preferred Unit Purchase Agreement (inclusive of certain Joinder Agreements entered into on March 18, 2019, the Preferred Unit Purchase Agreement) with certain investors to issue and sell in a private placement (the EQM Private Placement) an aggregate of 24,605,291 Series A Preferred Units for a cash purchase price of $48.77 per Series A Preferred Unit (the Series A Preferred Unit Purchase Price), resulting in total gross proceeds of approximately $1.2 billion . The net proceeds from the EQM Private Placement were used in part to fund the purchase price in the Bolt-on Acquisition (defined in Note 3 ) and to pay certain fees and expenses related to the Bolt-on Acquisition, and the remainder was used for general partnership purposes. The EQM Private Placement closed concurrently with the closing of the Bolt-on Acquisition on April 10, 2019 . See Note 3 . The Series A Preferred Units rank senior to all EQM common units and Class B units with respect to distribution rights and rights upon liquidation. The Series A Preferred Units vote on an as-converted basis with the EQM common units and Class B units and have certain other class voting rights with respect to any amendment to the EQM Partnership Agreement or its certificate of limited partnership that would be adverse (other than in a de minimis manner) to any of the rights, preferences or privileges of the Series A Preferred Units. The holders of the Series A Preferred Units are entitled to receive cumulative quarterly distributions at a rate of $1.0364 per Series A Preferred Unit for the first twenty distribution periods following the EQM Private Placement, and thereafter the quarterly distributions on the Series A Preferred Units will be an amount per Series A Preferred Unit for such quarter equal to (i) the Series A Preferred Unit purchase price of $48.77 per such unit, multiplied by (ii) a percentage equal to the sum of (A) the greater of (x) the three-month LIBOR as of the second London banking day prior to the beginning of the applicable quarter and (y) 2.59% , and (B) 6.90% , multiplied by (iii) 25% . EQM will not be entitled to pay any distributions on any junior securities, including any EQM common units or Class B units, prior to paying the quarterly distributions payable to the holders of Series A Preferred Units, including any previously accrued and unpaid distributions. Preferred Restructuring Agreement. As discussed in Note 1 , on February 26, 2020, the Company and EQM entered into the Restructuring Agreement with the Investors, pursuant to which the parties thereto agreed that, concurrently with the closing of the EQM Merger: (i) EQM will redeem $600 million aggregate principal amount of the Investors' Series A Preferred Units issued and outstanding immediately prior to the effective time of the Restructuring Closing (defined herein) for cash at 101% of the Series A Preferred Unit Purchase Price plus any accrued and unpaid distribution amounts and partial period distribution amounts, and (ii) after giving effect to such redemption, each remaining issued and outstanding Series A Preferred Unit will be exchanged for 2.44 Equitrans Midstream Preferred Shares, in each case, in connection with the occurrence of the “Series A Change of Control” (as defined in the EQM Partnership Agreement) that will occur upon the closing of the EQM Merger. The Equitrans Midstream Preferred Shares to be issued will not be registered under the Securities Act of 1933, as amended (the Securities Act), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The Restructuring is expected to close substantially concurrent with the closing of the EQM Merger (the Restructuring Closing), subject to the delivery of certain closing deliverables and certain closing conditions, including, among others: (i) the continued accuracy of the representations and warranties contained in the Restructuring Agreement; (ii) the performance by each party of its respective obligations under the Restructuring Agreement; (iii) the absence of any suit, action or proceeding by any governmental authority restraining, precluding, enjoining or prohibiting the Restructuring; (iv) the closing of the EQM Merger either prior to or concurrently with the Restructuring Closing; and (v) the execution of certain agreements and delivery of certain documents related to the Restructuring, including the certificate of designations to be filed by the Company with the Pennsylvania Department of State at the Restructuring Closing (the Certificate of Designations) and a registration rights agreement to be entered into by and among the Company and the Investors (the Registration Rights Agreement). Pursuant to the Restructuring Agreement, in connection with the Restructuring Closing, the Company will file a statement with respect to shares, attaching the Certificate of Designations, with the Pennsylvania Department of State to, among other things, authorize and establish the designations, rights and preferences of the Equitrans Midstream Preferred Shares. The Equitrans Midstream Preferred Shares will be a new class of security that will rank pari passu with any other outstanding class or series of preferred stock of Equitrans Midstream and senior to Equitrans Midstream common stock with respect to dividend rights and rights upon liquidation. The Equitrans Midstream Preferred Shares will vote on an as-converted basis with Equitrans Midstream common stock and will have certain other class voting rights with respect to any amendment to the Certificate of Designations or the Company’s Amended and Restated Articles of Incorporation that would be adverse (other than in a de minimis manner) to any of the rights, preferences or privileges of the Equitrans Midstream Preferred Shares. The holders of the Equitrans Midstream Preferred Shares will receive cumulative quarterly dividends at a rate per annum of 9.75% for each quarter ending on or before March 31, 2024, and thereafter the quarterly dividends at a rate per annum equal to the sum of (i) three-month LIBOR as of the LIBOR Determination Date (as defined in the Certificate of Designations) in respect of the applicable quarter and (ii) 8.15% ; provided that such rate per annum in respect of periods after March 31, 2024 will not be less than 10.50% . The Company will not be entitled to pay any dividends on any junior securities, including on Equitrans Midstream common stock, prior to paying the quarterly dividends payable to the Equitrans Midstream Preferred Shares, including any previously accrued and unpaid dividends. Each holder of the Equitrans Midstream Preferred Shares may upon issuance elect to convert all or any portion of the Equitrans Midstream Preferred Shares owned by it into Equitrans Midstream common stock initially on a one-for-one basis, subject to certain anti-dilution adjustments and an adjustment for any dividends that have accrued but not been paid when due and partial period dividends (referred to as the “conversion rate”), at any time (but not more often than once per fiscal quarter) after April 10, 2021 (or earlier liquidation, dissolution or winding up of the Company), provided that any conversion involves an aggregate number of Equitrans Midstream Preferred Shares of at least $20 million (calculated based on the closing price of the Equitrans Midstream common stock on the trading day preceding notice of the conversion) or such lesser amount if such conversion relates to all of a holder’s remaining Equitrans Midstream Preferred Shares or if such conversion is approved by the Company's Board of Directors. So long as the holders of the Equitrans Midstream Preferred Shares have not elected to convert all of their Equitrans Midstream Preferred Shares into Equitrans Midstream common stock, Equitrans Midstream may elect to convert all of the Equitrans Midstream Preferred Shares for Equitrans Midstream common stock, at the then-applicable conversion rate, at any time after April 10, 2021 if (i) the shares of Equitrans Midstream common stock are listed for, or admitted to, trading on a national securities exchange, (ii) the closing price per share of Equitrans Midstream common stock on the national securities exchange on which the shares of Equitrans Midstream common stock are listed for, or admitted to, trading exceeds $27.99 for the 20 consecutive trading days immediately preceding notice of the conversion, (iii) the average daily trading volume of the Equitrans Midstream common stock on the national securities exchange on which the shares of Equitrans Midstream common stock are listed for, or admitted to, trading exceeds 1,000,000 shares (subject to certain adjustments) of Equitrans Midstream common stock for the 20 consecutive trading days immediately preceding notice of the conversion, (iv) the Company has an effective registration statement on file with the SEC covering resales of the shares of Equitrans Midstream common stock to be received by such holders upon any such conversion and (v) the Company has paid all prior accumulated and unpaid dividends in cash in full to the holders. Upon certain events involving a Change of Control (as defined in the Certificate of Designations) in which more than 90% of the consideration payable to the Company, or the holders of the Equitrans Midstream common stock is payable in cash, the Equitrans Midstream Preferred Shares will automatically convert into Equitrans Midstream common stock at a conversion ratio equal to the greater of (i) the quotient of (a) the sum of (x) $19.99 (such per share price at which the Equitrans Midstream Preferred Shares will be issued, the Equitrans Midstream Preferred Share Issue Price plus (y) any accrued and unpaid dividends on such date, including any partial period dividends, with respect to the Equitrans Midstream Preferred Shares on such date, divided by (b) the Equitrans Midstream Preferred Share Issue Price and (ii) the quotient of (a) the sum of (x)(1) the Equitrans Midstream Preferred Share Issue Price multiplied by (2) 110% plus (y) any accrued and unpaid dividends on such date, including any partial period dividends with respect to the Equitrans Midstream Preferred Shares on such date, divided by (ii) the volume weighted average price of the shares of Equitrans Midstream common stock for the 30-day period ending immediately prior to the execution of definitive documentation relating to the Change of Control. In connection with other Change of Control events that do not satisfy the 90% cash consideration threshold described above, in addition to certain other conditions, each holder of Equitrans Midstream Preferred Shares may elect to (i) convert all, but not less than all, of its Equitrans Midstream Preferred Shares into Equitrans Midstream common stock at the then applicable conversion rate, (ii) if the Company is not the surviving entity (or if the Company is the surviving entity, but Equitrans Midstream common stock will cease to be listed), require the Company to use commercially reasonable efforts to cause the surviving entity in any such transaction to issue a substantially equivalent security that has rights, preferences and privileges substantially equivalent to the Equitrans Midstream Preferred Shares (or if the Company is unable to cause such substantially equivalent securities to be issued, to exercise the option described in clause (i) or (iv) hereof or elect to convert such Equitrans Midstream Preferred Shares at a conversion ratio reflecting a multiple of invested capital), (iii) if the Company is the surviving entity, continue to hold the Equitrans Midstream Preferred Shares or (iv) require the Company to redeem the Equitrans Midstream Preferred Shares at a price per share equal to 101% of the Equitrans Midstream Preferred Share Issue Price, plus accrued and unpaid dividends, including any partial period dividends on the applicable Equitrans Midstream Preferred Shares on such date, which redemption price may be payable in cash, Equitrans Midstream common stock or a combination thereof at the election of the Company's Board of Directors (and, if payable in Equitrans Midstream common stock, such Equitrans Midstream common stock will be issued at 95% of the volume-weighted average price of Equitrans Midstream common stock for the 20-day period ending on the fifth trading day immediately preceding the consummation of the Change of Control). Any holder of Equitrans Midstream Preferred Shares that requires the Company to redeem its Equitrans Midstream Preferred Shares pursuant to clause (iv) above will have the right to withdraw such election with respect to all, but not less than all, of its Equitrans Midstream Preferred Shares at any time prior to the fifth trading day immediately preceding the consummation of the Change of Control and instead elect to be treated in accordance with any of clauses (i), (ii) or (iii) above. At any time on or after January 1, 2024, the Company will have the right, subject to applicable law, to redeem the Equitrans Midstream Preferred Shares, in whole or in part, by paying cash for each Equitrans Midstream Preferred Share to be redeemed in an amount equal to the greater of (a) the sum of (i)(1) the Equitrans Midstream Preferred Share Issue Price multiplied by (2) 110% , plus (ii) any accrued and unpaid dividends, including partial period dividends, with respect to the Equitrans Midstream Preferred Shares on such date and (b) the amount the holder of such Equitrans Midstream Preferred Share would receive if such holder had converted such Equitrans Midstream Preferred Share into shares of Equitrans Midstream common stock at the then-applicable conversion ratio and the Company liquidated immediately thereafter. Pursuant to the terms of the Restructuring Agreement, in connection with the Restructuring Closing, the Company has agreed to enter into the Registration Rights Agreement pursuant to which, among other things, the Company will give the Investors certain rights to require the Company to file and maintain one or more registration statements with respect to the resale of the Equitrans Midstream Preferred Shares and the shares of Equitrans Midstream common stock that are issuable upon conversion of the Equitrans Midstream Preferred Shares, and to require the Company to initiate underwritten offerings for the Equitrans Midstream Preferred Shares and the shares of Equitrans Midstream common stock that are issuable upon conversion of the Equitrans Midstream Preferred Shares. Shared Assets Transaction. On March 31, 2019, EQM entered into an Assignment and Bill of Sale (the Assignment and Bill of Sale) with the Company pursuant to which EQM acquired certain assets and assumed certain leases that primarily support EQM's operations for an aggregate cash purchase price of $49.7 million (the initial purchase price), which reflected the net book value of in-service assets and expenditures made for assets not yet in-service (collectively, and inclusive of the additional assets subsequently acquired as described in the following sentences, the Shared Assets Transaction). Further, pursuant to the Assignment and Bill of Sale, EQM acquired, effective on the first day of the second quarter of 2019, certain additional assets from the Company for $8.9 million in cash consideration, reflecting the net book value of in-service assets and expenditures made in respect of assets not yet in-service as of June 30, 2019, which subsequent purchase price was subject to certain adjustments. Additionally, pursuant to the Assignment and Bill of Sale, EQM acquired, effective on the first day of the third quarter of 2019, additional assets from the Company for a de minimis dollar amount reflecting the net book value of such assets as of September 30, 2019. The initial and subsequent purchase prices were funded utilizing the Amended EQM Credit Facility (defined in Note 9 ). Prior to the Shared Assets Transaction, EQM made quarterly payments to the Company based on fees allocated from the Company for use of in-service assets transferred to EQM in the Shared Assets Transaction. In connection with the entry into the Assignment and Bill of Sale, the omnibus agreement among the Company, EQM and the EQM General Partner (as successor to the former EQM general partner) was amended and restated in order to, among other things, govern the Company’s use, and payment for such use, of the acquired assets following their conveyance to EQM and provide for reimbursement of EQM by the Company for expenses incurred by EQM in connection with such use. EQM Cash Distribution. On April 27, 2020 , the Board of Directors of the EQM General Partner declared a cash distribution to EQM's common unitholders for the first quarter of 2020 of $0.3875 per EQM common unit. The cash distribution was paid on May 14, 2020 to EQM's common unitholders of record at the close of business on May 5, 2020 . Cash distributions paid by EQM to the Company were approximately $45.4 million with respect to the Company's limited partner interest in EQM. In addition, on April 27, 2020 , the Board of Directors of the EQM General Partner declared a quarterly cash distribution on the Series A Preferred Units for the first quarter of 2020 of $1.0364 per Series A Preferred Unit. The cash distribution was paid on May 14, 2020 to holders of Series A Preferred Units of record at the close of business on May 5, 2020 . |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions and Mergers EQM Merger. As discussed in Note 1 , on February 26, 2020, the Company, EQM, EQM LP, Merger Sub and the EQM General Partner entered into the EQM Merger Agreement, pursuant to which Merger Sub will merge with and into EQM, with EQM continuing and surviving as an indirect wholly owned subsidiary of the Company following the EQM Merger. Following the EQM Merger, EQM will no longer be a publicly traded entity. The Company expects the EQM Merger to close in June 2020 , subject to customary closing conditions, including approvals of EQM's limited partners and the Company's shareholders. The Equitrans Midstream Special Meeting (defined herein) and the EQM Special Meeting (defined herein) are both scheduled to be held on June 15, 2020. Under the terms of the EQM Merger Agreement, and subject to the satisfaction or waiver of certain conditions therein, at the effective time of the EQM Merger (the Effective Time), subject to applicable tax withholding, (i) each outstanding EQM common unit, other than EQM common units owned by the Company and its subsidiaries, will be converted into the right to receive (assuming no adjustment contemplated in the EQM Merger Agreement) 2.44 shares of Equitrans Midstream common stock (the Merger Consideration); (ii) (x) $600.0 million aggregate principal amount of the Series A Preferred Units issued and outstanding immediately prior to the Effective Time will be redeemed by EQM for cash at 101% of the Series A Preferred Unit Purchase Price plus any accrued and unpaid distribution amounts and partial period distribution amounts and, (y) after giving effect to such redemption, each remaining issued and outstanding Series A Preferred Unit will be exchanged for 2.44 Equitrans Midstream Preferred Shares; and (iii) each outstanding phantom unit relating to an EQM common unit issued pursuant to the Amended and Restated EQGP Services, LLC 2012 Long-Term Incentive Plan, dated as of February 22, 2019 (the EQM LTIP), and any other award issued pursuant to the EQM LTIP, whether vested or unvested, will be converted into the right to receive, with respect to each EQM common unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). The limited partner interests in EQM owned by the Company and its subsidiaries (including the Class B units) will remain outstanding as limited partner interests in the surviving entity. The EQM General Partner will continue to own the non-economic general partner interest in the surviving entity. EQM agreed to, and the EQM General Partner will use its reasonable best efforts to cause its and EQM's and its subsidiaries' representatives to, cease and cause to be terminated any discussions or negotiations with any person conducted prior to the execution of the EQM Merger Agreement with respect to an alternative proposal, not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative business combinations, subject to certain exceptions with respect to unsolicited proposals received by EQM. In addition, EQM has agreed to call a special meeting of the limited partners of EQM (the EQM Special Meeting) to approve the EQM Merger Agreement. The Conflicts Committee of the Board of Directors of the EQM General Partner (the EQM Conflicts Committee) may, subject to certain conditions, change its recommendation in favor of approval of the EQM Merger Agreement and the EQM Merger if, in connection with receipt of a superior proposal or the occurrence of a Partnership Changed Circumstance (as defined in the EQM Merger Agreement), it determines in good faith that failure to take such action would constitute a breach of, or otherwise be inconsistent with, its duties under applicable law, as modified by the EQM Partnership Agreement. However, even if the EQM Conflicts Committee changes its recommendation, the EQM Merger Agreement requires EQM to submit the EQM Merger Agreement for approval by the limited partners of EQM. The EQM Merger Agreement contains representations and warranties from the parties and indemnification obligations, and each party has agreed to certain covenants, including, among others, covenants relating to, among others, (i) the conduct of business during the interim period between the execution of the EQM Merger Agreement and the Effective Time and (ii) the obligation to use reasonable best efforts to cause the EQM Merger to be consummated. Completion of the EQM Merger is conditioned upon, among others: (i) approval (the Partnership Approval) of the EQM Merger Agreement and the EQM Merger by holders of a majority of the outstanding EQM common units, Class B units, and Series A Preferred Units, with such Series A Preferred Units treated as EQM common units on an as-converted basis, voting together as a single class at the EQM Special Meeting; (ii) approval (the Equitrans Midstream Shareholder Approval) of the issuance of Equitrans Midstream common stock as Merger Consideration and the issuance of the Equitrans Midstream Preferred Shares by a majority of votes cast at a special meeting of holders of shares of Equitrans Midstream common stock (the Equitrans Midstream Special Meeting); (iii) there being no law or injunction prohibiting consummation of the transactions contemplated under the EQM Merger Agreement; (iv) the effectiveness of a registration statement on Form S-4, and no stop order suspending the effectiveness of such registration statement, relating to the issuance of shares of Equitrans Midstream common stock pursuant to the EQM Merger Agreement; (v) approval for listing on the NYSE of the shares of Equitrans Midstream common stock issuable pursuant to the EQM Merger Agreement; (vi) subject to specified materiality standards, the accuracy of certain representations and warranties of each party; (vii) the delivery of a tax opinion to the Company in form and substance approved by EQT, satisfying the requirements of an unqualified tax opinion (as defined in the Tax Matters Agreement, dated November 12, 2018, between EQT and the Company (the Tax Matters Agreement)) with respect to the transactions contemplated by the EQM Merger Agreement; (viii) compliance with, or waiver, if permissible, by the respective parties in all material respects with their respective covenants; and (ix) closing of the Restructuring. The EQM Merger Agreement contains provisions granting each of the Company and EQM the right to terminate the EQM Merger Agreement for certain reasons, including, among others, (i) by the mutual written consent of the Company and EQM; (ii) if the EQM Merger has not been consummated on or before August 26, 2020; (iii) if any law, injunction, judgment or ruling enacted, promulgated, issued, entered, amended or enforced by any governmental authority shall be in effect, and has become final and nonappealable, enjoining, restraining, preventing or prohibiting the consummation of the transactions contemplated by the EQM Merger Agreement or making the consummation of the transactions contemplated by the EQM Merger Agreement illegal; (iv) if the EQM Special Meeting shall have concluded and the Partnership Approval shall not have been obtained; (v) if the Equitrans Midstream Special Meeting shall have concluded and the Equitrans Midstream Shareholder Approval shall not have been obtained; or (vi) if a Partnership Adverse Recommendation Change (as defined in the EQM Merger Agreement) shall have occurred prior to receipt of the Partnership Approval (provided that EQM may only terminate as a result of Partnership Changed Circumstances (as defined in the EQM Merger Agreement)). The EQM Merger Agreement contains provisions granting the Company the right to terminate the EQM Merger Agreement for certain reasons, including, (a) if EQM or the EQM General Partner shall have breached or failed to perform its representations, warranties, covenants or agreements set forth in the EQM Merger Agreement, which breach or failure (x) would give rise to a failure of certain of the conditions to the Company’s obligations to consummate the transactions contemplated by the EQM Merger Agreement and (y) is incapable of being cured or is not cured within the earlier of 30 days of written notice of such breach or failure by the Company, provided the Company shall not have the right to terminate if the Company, EQM LP or Merger Sub are in material breach of any of their representations, warranties, covenants or agreements contained in the EQM Merger Agreement, or (b) prior to receipt of Partnership Approval, EQM is in Willful Breach (as defined in the EQM Merger Agreement) of its obligations set forth under the non-solicitation provisions of the EQM Merger Agreement, provided the Company shall not have the right to terminate if the Company, EQM LP or Merger Sub are in material breach of any of its representations, warranties, covenants or agreements contained in the EQM Merger Agreement. The EQM Merger Agreement contains provisions granting EQM the right to terminate the EQM Merger Agreement if (a) the Company has breached or failed to perform its representations, warranties, covenants or agreements set forth in the EQM Merger Agreement, which breach or failure (1) would give rise to a failure of certain of the conditions to EQM’s obligations to consummate the transactions under the EQM Merger Agreement and (2) is incapable of being cured or is not cured within the earlier of 30 days of written notice of such breach or failure by EQM, provided EQM shall not have the right to terminate if EQM or the EQM General Partner is in material breach of any of its representations, warranties, covenants or agreements contained in the EQM Merger Agreement or (b) prior to receipt of the Partnership Approval, in order to enter into an agreement providing for a Superior Proposal (as defined in the EQM Merger Agreement). Upon termination of the EQM Merger Agreement under certain circumstances, EQM will be obligated to (i) pay the Company a termination fee equal to $36.5 million and/or (ii) reimburse the Company for its expenses in an amount not to exceed $10 million . The EQM Merger Agreement also provides that upon termination of the EQM Merger Agreement under certain circumstances, the Company will be obligated to reimburse EQM for its expenses in an amount not to exceed $10 million . The Company recorded $11.4 million in expenses related to the EQM Merger and the EQT Global GGA (defined in Note 4 ) during the three months ended March 31, 2020 . The expenses primarily include advisor, legal and accounting fees related to the transactions and are included in separation and other transaction costs in the statements of consolidated comprehensive income. Bolt-on Acquisition. On March 13, 2019, EQM entered into a Purchase and Sale Agreement with North Haven Infrastructure Partners II Buffalo Holdings, LLC (NHIP), an affiliate of Morgan Stanley Infrastructure Partners, pursuant to which EQM acquired from NHIP a 60% Class A interest in Eureka Midstream Holdings, LLC (Eureka Midstream) and a 100% interest in Hornet Midstream Holdings, LLC (Hornet Midstream) (collectively, the Bolt-on Acquisition) for total consideration of approximately $1.04 billion , composed of approximately $852 million in cash, net of purchase price adjustments, and approximately $192 million in assumed pro-rata debt. At the time of the acquisition, Eureka Midstream owned a 190 -mile gathering header pipeline system in Ohio and West Virginia that services both dry Utica and wet Marcellus Shale production and Hornet Midstream owned a 15 -mile, high-pressure gathering system in West Virginia that connects to the Eureka Midstream system. The Bolt-on Acquisition closed on April 10, 2019 and was funded through proceeds from the EQM Private Placement that closed concurrently with the Bolt-on Acquisition. See Note 2 for further information regarding the EQM Private Placement. The Bolt-on Acquisition was accounted for as a business combination using the acquisition method. As a result of the acquisition, the Company recognized $99.2 million of goodwill, which was allocated to the Gathering segment. Such goodwill primarily related to additional commercial opportunities, a diversified producer customer mix, increased exposure to dry Utica and wet Marcellus acreage and operating leverage within the Gathering segment. The purchase price allocation and related adjustments were finalized during the fourth quarter of 2019. The following table summarizes the final purchase price and allocation of the fair value of the assets acquired and liabilities assumed in the Bolt-on Acquisition as of April 10, 2019 by the Company, as well as certain measurement period adjustments made subsequent to the Company's initial valuation. (in thousands) Preliminary Purchase Price Allocation (As initially reported) Measurement Period Adjustments (a) Purchase Price Allocation (As adjusted) Consideration given: Cash consideration (b) $ 861,250 $ (11,404 ) $ 849,846 Buyout of portion of Eureka Midstream Class B Units and incentive compensation 2,530 — 2,530 Total consideration 863,780 (11,404 ) 852,376 Fair value of liabilities assumed: Current liabilities 52,458 (9,857 ) 42,601 Long-term debt 300,825 — 300,825 Other long-term liabilities 10,203 — 10,203 Amount attributable to liabilities assumed 363,486 (9,857 ) 353,629 Fair value of assets acquired: Cash 15,145 — 15,145 Accounts receivable 16,817 — 16,817 Inventory 12,991 (26 ) 12,965 Other current assets 882 — 882 Net property, plant and equipment 1,222,284 (8,906 ) 1,213,378 Intangible assets (c) 317,000 (6,000 ) 311,000 Deferred tax asset 5,773 (5,268 ) 505 Other assets 14,567 — 14,567 Amount attributable to assets acquired 1,605,459 (20,200 ) 1,585,259 Noncontrolling interests (486,062 ) 7,602 (478,460 ) Goodwill as of April 10, 2019 $ 107,869 $ (8,663 ) $ 99,206 Impairment of goodwill (d) (99,206 ) Goodwill as of March 31, 2020 $ — (a) The Company recorded measurement period adjustments to its preliminary acquisition date fair values due to the refinement of its valuation models, assumptions and inputs. The measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. (b) The cash consideration for the Bolt-on Acquisition was adjusted by approximately $11.4 million related to working capital adjustments and the release of all escrowed indemnification funds to EQM. (c) After considering the refinements to the valuation models, the Company estimated the fair value of the customer-related intangible assets acquired as part of the Bolt-on Acquisition to be $311.0 million . As a result, the fair value of the customer-related intangible assets was decreased by $6.0 million on September 30, 2019 with a corresponding increase to goodwill. In addition, the change to the provisional amount resulted in a decrease in amortization expense and accumulated amortization of approximately $0.4 million . (d) During the third quarter of 2019, the Company identified impairment indicators that suggested the fair value of its goodwill was more likely than not below its carrying amount. As such, the Company performed an interim goodwill impairment assessment, which resulted in the Company recognizing impairment to goodwill of approximately $268.1 million , of which $99.2 million was associated with its Eureka/Hornet reporting unit, bringing the reporting unit's goodwill balance to zero . See Note 6 for a discussion regarding the Share Purchase Agreements. |
Impairments of Long-Lived Asset
Impairments of Long-Lived Assets and Other-Than-Temporary Decline in Value | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Impairments of Long-Lived Assets and Other-Than-Temporary Decline in Value | Impairments of Long-Lived Assets and Other-Than-Temporary Decline in Value Goodwill. On February 26, 2020 (the EQT Global GGA Effective Date), EQM entered into a Gas Gathering and Compression Agreement (the EQT Global GGA) with EQT for the provision of certain gas gathering services to EQT in the Marcellus and Utica Shales of Pennsylvania and West Virginia (as further discussed in Note 6 ). Prior to the EQT Global GGA Effective Date, the Company operated three reportable operating segments and seven reporting units, which are one level below the operating segment level and are generally based on how segment management reviews the Company's operating results. Commencing with the EQT Global GGA Effective Date, the Company reduced its reporting units from seven to six and maintained its three reportable operating segments. As of the EQT Global GGA Effective Date, the only reporting unit to which the Company had goodwill recorded related to the Pennsylvania gathering assets acquired in connection with EQM's merger with Rice Midstream Partners LP in July 2018 (RMP PA Gas Gathering reporting unit). As a result of the EQT Global GGA, the assets under, and operations associated with, the RMP PA Gas Gathering reporting unit and the reporting unit associated with the gas gathering and compression activities of EQM Gathering Opco, LLC, an indirect wholly owned subsidiary of EQM (EQM Opco reporting unit), were combined to service a collective MVC under the agreement. Therefore, effective on the EQT Global GGA Effective Date, the RMP PA Gas Gathering reporting unit was merged with and into the EQM Opco reporting unit, with the EQM Opco reporting unit surviving. During the first quarter of 2020 , the Company identified impairment indicators in the form of significant declines in the unit price of EQM's common units and corresponding market capitalization. Management considered these declines as indicators that the fair value of the RMP PA Gas Gathering reporting unit was more likely than not below its carrying amount, and the performance of an interim quantitative goodwill impairment assessment was required. Additionally, as a result of the combination of the RMP PA Gas Gathering reporting unit and the EQM Opco reporting unit, the Company tested both the RMP PA Gas Gathering and the merged EQM Opco reporting units for goodwill impairment. In estimating the fair value of the RMP PA Gas Gathering and the merged EQM Opco reporting units, the Company used a combination of the income approach and the market approach. The Company used the income approach’s discounted cash flow method, which applies significant inputs not observable in the public market (Level 3), including estimates and assumptions related to the use of an appropriate discount rate, future throughput volumes, operating costs, capital spending and changes in working capital. The Company used the market approach’s comparable company and reference transaction methods. The comparable company method evaluates the value of a company using metrics of other businesses of similar size and industry. The reference transaction method evaluates the value of a company based on pricing multiples derived from similar transactions entered into by similar companies. As a result of the interim assessment, the Company determined that the fair values of the RMP PA Gas Gathering reporting unit and the merged EQM Opco reporting unit, as applicable, were greater than their respective carrying values. No impairment to goodwill was recorded during the three months ended March 31, 2020 . The Company believes the estimates and assumptions used in estimating its reporting units’ fair values are reasonable and appropriate; however, different assumptions and estimates could materially affect the calculated fair values of the RMP PA Gas Gathering reporting unit and the merged EQM Opco reporting unit and the resulting conclusion on impairment of goodwill, which could materially affect the Company’s results of operations and financial position. Additionally, actual results could differ from these estimates. Any additional adverse changes in the future could reduce the underlying cash flows used to estimate the fair value of the merged EQM Opco reporting unit and could result in a decline in fair value that could trigger future impairment charges relating to the EQM Opco reporting unit. Long-lived assets, including intangible assets and equity method investments. As of March 31, 2020 , the Company performed a recoverability test of the Hornet Midstream long-lived assets due to decreased producer activity. As a result of the recoverability test, management determined that the carrying value of the Hornet Midstream long-lived assets acquired in the Bolt-on Acquisition was not recoverable under ASC 360, Impairment Testing: Long-Lived Assets Classified as Held and Used . The Hornet Midstream asset group consists of gathering assets and customer-related intangible assets. During the first quarter of 2020 , the Company estimated the fair value of the Hornet Midstream asset group and determined that the fair value was not in excess of the assets’ carrying value, which resulted in impairment charges of approximately $37.9 million to the gathering assets and approximately $17.7 million to the customer-related intangible assets both within the Company’s Gathering segment. The non-cash impairment charges are included in the impairments of long-lived assets line on the statements of consolidated comprehensive income for the period ended March 31, 2020 . The Company is also required to evaluate EQM’s equity method investments, including investments in the MVP Joint Venture, to determine whether they are impaired under ASC 323, Investments - Equity Method and Joint Ventures . The standard for determining whether an impairment must be recorded under ASC 323 is whether there occurred an other-than-temporary decline in value. The evaluation and measurement of impairments under ASC 323 involves the same uncertainties as described for long-lived assets that EQM owns directly and accounts for in accordance with ASC 360. The estimates that the Company makes with respect to EQM's equity method investments are based upon assumptions that management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. Additionally, if the projects in which EQM holds these investments recognize an impairment under ASC 360, the Company would record its proportionate share of that impairment loss and would evaluate its investment for an other-than-temporary decline in value under ASC 323. The Company has evaluated its equity method investments, including investments in the MVP Joint Venture, as of March 31, 2020 and determined that there was not an other-than-temporary decline in value. |
Financial Information by Busine
Financial Information by Business Segment | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Financial Information by Business Segment | Financial Information by Business Segment The Company, through its control of EQM, reports its operations in three segments that reflect its three lines of business: Gathering, Transmission and Water. Gathering includes EQM's high-pressure gathering lines and FERC-regulated low-pressure gathering lines; Transmission includes EQM's FERC-regulated interstate pipelines and storage system; and Water consists of EQM's water pipelines, impoundment facilities, pumping stations, take point facilities and measurement facilities. On April 30, 2020, EQM filed with the FERC its request to abandon the remaining 927 miles of its non-core, FERC-regulated low-pressure gathering pipelines (included in the Gathering segment) and 11 related compressor station facilities. Three Months Ended March 31, 2020 2019 (Thousands) Revenues from customers: Gathering $ 310,047 $ 261,881 Transmission 106,615 109,859 Water 36,451 18,042 Total operating revenues $ 453,113 $ 389,782 Operating income: Gathering $ 155,228 $ 182,078 Transmission 78,434 84,750 Water 17,752 1,186 Other (a) (9,332 ) (7,973 ) Total operating income $ 242,082 $ 260,041 Reconciliation of operating income to net income: Equity income (b) $ 54,072 $ 31,063 Other income 4,163 1,861 Loss on early extinguishment of debt 24,864 — Net interest expense 66,754 60,949 Income tax expense 19,139 32,450 Net income $ 189,560 $ 199,566 (a) Includes separation and other transaction costs and other operating expenses incurred by the Company separate from and in addition to similar costs incurred by EQM. (b) Equity income is included in the Transmission segment. March 31, 2020 December 31, 2019 (Thousands) Segment assets: Gathering $ 7,633,394 $ 7,572,911 Transmission (a) 4,034,646 3,903,707 Water 208,651 202,440 Total operating segments 11,876,691 11,679,058 Headquarters, including cash 312,986 362,651 Total assets $ 12,189,677 $ 12,041,709 (a) The equity investments in the MVP Joint Venture are included in the Transmission segment. Three Months Ended March 31, 2020 2019 (Thousands) Depreciation: Gathering $ 40,440 $ 28,116 Transmission 13,558 12,533 Water 7,116 6,416 Other 234 3,446 Total $ 61,348 $ 50,511 Capital expenditures for segment assets: Gathering (a) $ 111,454 $ 158,000 Transmission (b) 10,798 18,762 Water 3,476 9,175 Other 1,876 3,396 Total (c) $ 127,604 $ 189,333 (a) Includes approximately $12.5 million of capital expenditures related to the noncontrolling interest in Eureka Midstream for the three months ended March 31, 2020 . (b) Transmission capital expenditures do not include capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $45.2 million and $144.8 million for the three months ended March 31, 2020 and 2019 , respectively. (c) The Company accrues capital expenditures when the work has been completed but the associated bills have not yet been paid. Accrued capital expenditures are excluded from the statements of consolidated cash flows until they are paid. Accrued capital expenditures were approximately $61.0 million and $85.8 million at March 31, 2020 and December 31, 2019 , respectively. Accrued capital expenditures were approximately $89.7 million and $109.3 million at March 31, 2019 and December 31, 2018 , respectively. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customers | Revenue from Contracts with Customers For the three months ended March 31, 2020 and 2019 , all revenues recognized on the Company's statements of consolidated comprehensive income are from contracts with customers. As of March 31, 2020 and December 31, 2019 , all receivables recorded on the Company's consolidated balance sheets represent performance obligations that have been satisfied and for which an unconditional right to consideration exists. Summary of Disaggregated Revenues. The tables below provide disaggregated revenue information by business segment. Three Months Ended March 31, 2020 Gathering Transmission Water Total (Thousands) Firm reservation fee revenues (a) $ 152,079 $ 99,597 $ 12,776 $ 264,452 Volumetric-based fee revenues 157,968 7,018 23,675 188,661 Total operating revenues $ 310,047 $ 106,615 $ 36,451 $ 453,113 Three Months Ended March 31, 2019 Gathering Transmission Water Total (Thousands) Firm reservation fee revenues $ 128,959 $ 99,224 $ 2,884 $ 231,067 Volumetric-based fee revenues 132,922 10,635 15,158 158,715 Total operating revenues $ 261,881 $ 109,859 $ 18,042 $ 389,782 (a) For the three months ended March 31, 2020 , firm reservation fee revenues associated with Gathering and Water included approximately $6.3 million and $5.0 million , respectively, of MVC unbilled revenues. Contract Assets. The Company recognizes contract assets in instances where billing occurs subsequent to revenue recognition and the Company's right to invoice the customer is conditioned on something other than the passage of time. The Company's contract assets primarily consist of revenue recognized under contracts containing MVC's whereby management has concluded (i) it is probable there will be a MVC deficiency payment at the end of the then current MVC period, which is typically the period beginning at the inception of such contracts through the successive twelve month periods after that date, and (ii) that a significant reversal of revenue recognized currently for the future MVC deficiency payment will not occur. As a result, the Company's contract assets related to the Company's future MVC deficiency payments are generally expected to be collected within the next twelve months and are included in other current assets in the Company's consolidated balance sheet until such time as the MVC deficiency payments are invoiced to the customer. The following table presents changes in the Company's unbilled revenue balance during the three months ended March 31, 2020 : Unbilled Revenue (Thousands) Balance as of January 1, 2020 $ — Revenue recognized in excess of amounts invoiced 11,305 Minimum volume commitments invoiced (a) — Balance as of March 31, 2020 $ 11,305 (a) Unbilled revenues are transferred to accounts receivable once the Company has an unconditional right to consideration from the customer. Contract Liabilities. As of March 31, 2020 , the Company's contract liabilities consist of deferred revenue associated with the EQT Global GGA in the form of advance payments from EQT associated with the Rate Relief Shares (as defined below) acquired by Equitrans Midstream as consideration for certain commercial terms and the initial fair value of the Henry Hub cash bonus payment provision (as defined below). The contract liabilities are classified as current or non-current according to when such amounts are expected to be recognized. As of March 31, 2020 , the contract liabilities are classified as non-current as none of the deferred revenue is expected to be recognized in revenue during the next five years. Contracts requiring advance payments and the recognition of contract liabilities are evaluated to determine whether the advance payments provide the Company with a significant financing benefit. This determination requires significant judgment and is based on the combined effect of the expected length of time between when the Company transfers the promised good or service to the customer and when the customer pays for those goods or services and the prevailing interest rates. The Company has assessed the EQT Global GGA and determined that this agreement does not contain a significant financing component. The following table presents changes in the Company's deferred revenue balances during the three months ended March 31, 2020 : Deferred Revenue (Thousands) Balance as of January 1, 2020 $ — Amounts recorded during the period 173,005 Amounts transferred during the period (a) — Balance as of March 31, 2020 $ 173,005 (a) Deferred revenues are recognized as revenue upon satisfaction of the Company's performance obligation to the customer. Summary of Remaining Performance Obligations. The following table summarizes the estimated transaction price allocated to the Company's remaining performance obligations under all contracts with firm reservation fees and MVCs as of March 31, 2020 that the Company will invoice or transfer from contract liabilities and recognize in future periods. 2020 (a) 2021 2022 2023 2024 Thereafter Total (Thousands) Gathering firm reservation fees $ 76,009 $ 173,406 $ 175,674 $ 173,691 $ 170,621 $ 1,388,240 $ 2,157,641 Gathering revenues supported by MVCs 382,384 570,492 606,232 638,577 633,626 5,356,728 8,188,039 Transmission firm reservation fees 255,426 374,688 371,639 333,315 273,711 2,505,063 4,113,842 Water revenues supported by MVCs 27,017 60,000 60,000 60,000 60,000 60,000 327,017 Total $ 740,836 $ 1,178,586 $ 1,213,545 $ 1,205,583 $ 1,137,958 $ 9,310,031 $ 14,786,539 (a) April 1, 2020 through December 31, 2020. Based on total projected contractual revenues, including projected contractual revenues from future capacity expected from expansion projects that are not yet fully constructed for which the Company has executed firm contracts, the Company's firm gathering contracts and firm transmission and storage contracts had weighted average remaining terms of approximately 15 years and 14 years, respectively, as of March 31, 2020 . EQT Global GGA. On the EQT Global GGA Effective Date, EQM entered into the EQT Global GGA with EQT for the provision by EQM of certain gas gathering services to EQT in the Marcellus and Utica Shales of Pennsylvania and West Virginia. Pursuant to the EQT Global GGA, EQT is subject to an initial annual MVC of 3.0 Bcf per day that gradually steps up to 4.0 Bcf per day for several years following the in-service date of the MVP. The EQT Global GGA runs from the EQT Global GGA Effective Date through December 31, 2035, and will renew annually thereafter unless terminated by EQT or EQM pursuant to its terms. Pursuant to the EQT Global GGA, EQM has certain obligations to build connections to connect EQT wells to its gathering system, which are subject to geographical limitations in relation to the dedicated area in Pennsylvania and West Virginia, as well as the distance of such connections to EQM's then-existing gathering system. Management has estimated the total consideration expected to be received over the life of the EQT Global GGA, including gathering MVC revenue with a declining rate structure, the fair value of the Rate Relief Shares and the initial fair value of the Henry Hub cash bonus payment provision. The total consideration is allocated proportionally to the performance obligation under the contract, which is to provide daily MVC capacity over the life of the contract, to recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. The performance obligations will be satisfied during the life of the contract based on a units of production methodology for the daily MVC capacity provided to EQT. Due to the declining rate structure, there will be periods during which the billable gathering MVC revenue will exceed the allocated consideration to the performance obligation, which will result in billable gathering MVC revenue being deferred to the contract liability. The deferred consideration amounts are deferred until recognized in revenue when the associated performance obligation has been satisfied and are classified as current or non-current according to when such amounts are expected to be recognized. In addition to the estimated total consideration allocated to the daily MVC, the EQT Global GGA includes other fees based on variable or volumetric-based services that will be recognized in the period the services are provided. The EQT Global GGA provides for potential cash bonus payments payable by EQT to EQM during the period beginning on the first day of the calendar quarter in which the MVP in-service date occurs through the earlier of the twelfth calendar quarter from that point, or the calendar quarter ending December 31, 2024 (the Henry Hub cash bonus payment provision). The potential cash bonus payments are conditioned upon the quarterly average of the NYMEX Henry Hub Natural Gas First of the Month Closing Index Price exceeding certain price thresholds. The Henry Hub cash bonus payment provision meets the definition of an embedded derivative that should be bifurcated from the host contract and accounted for separately in accordance with ASC 815, Derivatives and Hedging . The embedded derivative was recorded as a derivative asset at its estimated fair value at inception of approximately $51.5 million and as part of the contract liability to be included in the total consideration to be allocated to the performance obligation under ASC 606. Subsequent changes to the fair value of the derivative instrument through the end of the contract are recognized in other income on the Company's statements of consolidated comprehensive income. As of March 31, 2020 , the estimated fair value of the Henry Hub cash bonus payment provision was $55.7 million and is recorded in other assets on the Company's consolidated balance sheets. The gathering MVC fees payable by EQT (or its affiliates) to EQM set forth in the EQT Global GGA are subject to potential reductions for certain contract years as set forth in the EQT Global GGA, conditioned upon the in-service date of the MVP, which provide for estimated aggregate fee relief of approximately $270 million in the first year after the in-service date of the MVP, approximately $230 million in the second year after the in-service date of the MVP and approximately $35 million in the third year after the in-service date of the MVP. In addition, if the MVP in-service date has not occurred by January 1, 2022, EQT has an option, exercisable for a period of twelve months (or such shorter period if the in-service date of the MVP occurs), to forgo approximately $145 million of the gathering fee relief in the first year after the MVP in-service date and approximately $90 million of the gathering fee relief in the second year after the MVP in-service date in exchange for a cash payment from EQM to EQT in the amount of approximately $196 million (the EQT Cash Option). As consideration for the additional rate relief subject to the EQT Cash Option, the Company purchased shares of its common stock (see Rate Relief Shares discussed and defined below) from EQT. The consideration received for future contractual rate relief associated with the Rate Relief Shares was recorded at a fair value of approximately $121.5 million as a contract liability in accordance with ASC 606 and will be recognized as revenue over the life of the contract. As of March 31, 2020 , the total contract liability balance was approximately $173 million . For the three months ended March 31, 2020 , no revenue was recognized related to the contract liability. Water Services Letter Agreement. On February 26, 2020, EQM entered into a letter agreement with EQT, pursuant to which EQT agreed to utilize EQM for the provision of water services in Pennsylvania under one or more water services agreements to be negotiated between the parties (the Water Services Letter Agreement). The Water Services Letter Agreement is effective as of the first day of the first month following the MVP in-service date and shall expire on the fifth anniversary of such date. During each year of the Water Services Letter Agreement, EQT agreed that MVC fees payable to EQM for services pursuant to the Water Services Letter Agreement (or the related agreements) shall be equal to or greater than $60 million per year. Share Purchase Agreements. On February 26, 2020, the Company entered into two share purchase agreements (the Share Purchase Agreements) with EQT, pursuant to which the Company agreed to (i) purchase 4,769,496 shares of Equitrans Midstream common stock (the Cash Shares) from EQT in exchange for approximately $46 million in cash, (ii) purchase 20,530,256 shares of Equitrans Midstream common stock (the Rate Relief Shares and, together with the Cash Shares, the Share Purchases) from EQT in exchange for a promissory note in the aggregate principal amount of approximately $196 million (which EQT subsequently assigned to EQM as consideration for certain commercial terms under the EQT Global GGA), and (iii) pay EQT cash in the amount of approximately $7 million (the Cash Amount). On March 5, 2020, the Company completed the Share Purchases and paid the Cash Amount. The Company used proceeds from the EQM Credit Facility (defined in Note 9 ) to fund the purchase of the Cash Shares and to pay the Cash Amount in addition to other uses of proceeds. After the closing of the Share Purchases, the Company retired the Cash Shares and the Rate Relief Shares. Additionally, the Company recorded a $17.2 million deferred tax liability in conjunction with the Rate Relief Shares. Following the closing of the Share Purchases, as of March 31, 2020 , EQT owned, directly or indirectly, 25,299,751 shares of Equitrans Midstream common stock. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Related Party Transactions with EQT As of March 31, 2020, EQT remained a related party of the Company due to its ownership of 25,299,751 shares of Equitrans Midstream common stock, which represented an approximately 11.0% ownership interest in the Company. In the ordinary course of business, the Company, through EQM, engaged, and continues to engage, as applicable, in transactions with EQT and its affiliates, including, but not limited to, gathering agreements (including the EQT Global GGA), transportation service and precedent agreements, storage agreements and water services agreements. Tax Matters Agreement. On November 12, 2018, in connection with the Separation and Distribution, the Company and EQT entered into a the Tax Matters Agreement that governs the parties' respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution and certain related transactions to qualify as generally tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation with respect to tax matters. In addition, the Tax Matters Agreement imposes certain restrictions on the Company and its subsidiaries, including restrictions on certain equity issuances, business combinations, sales of assets and similar transactions, that are designed to preserve the tax-free status of the Distribution and certain related transactions. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event that the Distribution, together with certain related transactions, is not tax-free. In general, under the Tax Matters Agreement, each party is expected to be responsible for any taxes, whether imposed on the Company or EQT, that arise from (i) the failure of the Distribution, together with certain related transactions, to qualify for tax-free treatment, or (ii) if certain related transactions were to fail to qualify for their intended tax treatment, in each case, to the extent that the failure to qualify is attributable to actions, events or transactions relating to such party's respective stock, assets or business or a breach of the relevant representations or covenants made by that party in the Tax Matters Agreement. Credit Letter Agreement. On February 26, 2020, in connection with the execution of the EQT Global GGA, EQM and EQT entered into a letter agreement (the Credit Letter Agreement) pursuant to which, among other things, (a) EQM agreed to relieve certain credit posting requirements for EQT, in an amount up to approximately $250 million , under its commercial agreements with EQM, subject to EQT maintaining a minimum credit rating from two of three rating agencies of (i) Ba3 with Moody’s Investors Service (Moody's), (ii) BB- with S&P Global Ratings (S&P) and (iii) BB- with Fitch Investor Services (Fitch) and (b) EQM agreed to use commercially reasonable good faith efforts to negotiate similar credit support arrangements for EQT in respect of its commitments to the MVP Joint Venture. EQT Global GGA. See Notes 4 and 6 for further detail. Water Services Letter Agreement. See Note 6 for further detail. Share Purchase Agreements. See Note 6 for further detail. |
Investments in Unconsolidated E
Investments in Unconsolidated Entity | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entity | Investments in Unconsolidated Entity The MVP Joint Venture is constructing the MVP, an estimated 300 -mile natural gas interstate pipeline that will span from northern West Virginia to southern Virginia. EQM will operate the MVP and owned a 45.7% interest in the MVP project as of March 31, 2020 . On November 4, 2019, Con Edison exercised an option to cap its investment in the MVP project at approximately $530 million (excluding AFUDC). EQM and NextEra Energy, Inc. are obligated to, and RGC Resources, Inc., another member of the MVP Joint Venture owning an interest in the MVP project, has opted to, fund the shortfall in Con Edison's capital contributions, on a pro rata basis. As a result, based on the MVP Joint Venture's current budget for the project, EQM expects to fund an additional approximately $86 million (excluding AFUDC) in capital contributions to the MVP Joint Venture for the MVP project, and EQM's equity ownership in the MVP Joint Venture would progressively increase from 45.7% to approximately 47.0% . The MVP Joint Venture is a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. The Company, through EQM, is not the primary beneficiary of the MVP Joint Venture because the Company does not have the power to direct the activities that most significantly affect the MVP Joint Venture's economic performance. Certain business decisions, such as decisions to make distributions of cash, require a greater than 66 2/3% ownership interest approval, and no one member owns more than a 66 2/3% interest. In April 2018, the MVP Joint Venture announced the MVP Southgate project, a proposed 75 -mile interstate pipeline that will extend from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. EQM will operate the MVP Southgate pipeline and owned a 47.2% interest in the MVP Southgate project as of March 31, 2020 . In February 2020 , the MVP Joint Venture issued a capital call notice for the funding of the MVP project to MVP Holdco, LLC (MVP Holdco), a wholly owned subsidiary of EQM, for $87.4 million , of which $10.0 million and $23.2 million was paid in April 2020 and May 2020 , respectively, and $54.2 million is expected to be paid in June 2020 . The capital contributions payable and the corresponding increase to the investment balance are reflected on the consolidated balance sheet as of March 31, 2020 . The interests in the MVP and MVP Southgate projects are equity method investments for accounting purposes because EQM has the ability to exercise significant influence, but not control, over the MVP Joint Venture's operating and financial policies. Accordingly, EQM records adjustments to the investment balance for contributions to or distributions from the MVP Joint Venture and for EQM's pro-rata share of MVP Joint Venture earnings. Equity income, which is primarily related to EQM's pro-rata share of the MVP Joint Venture's AFUDC on the construction of the MVP, is reported in equity income in the Company's statements of consolidated comprehensive income. Pursuant to the MVP Joint Venture's limited liability company agreement, MVP Holdco is obligated to provide performance assurances, which may take the form of a guarantee from EQM (provided that EQM's debt is rated as investment grade in accordance with the requirements of the MVP Joint Venture's limited liability company agreement), a letter of credit or cash collateral, in favor of the MVP Joint Venture to provide assurance as to the funding of MVP Holdco's proportionate share of the construction budget for the MVP project. In 2019, EQM issued performance guarantees in an amount equal to 33% of EQM's proportionate share of the then-remaining construction budget for the MVP project. As of December 31, 2019 , EQM's performance guarantee was approximately $223 million , adjusted for capital contributions made by EQM during the fourth quarter of 2019. In addition, pursuant to the MVP Joint Venture's limited liability company agreement, MVP Holdco is obligated to provide performance assurances in respect of MVP Southgate, which performance assurances may take the form of a guarantee from EQM (provided that EQM's debt is rated as investment grade in accordance with the requirements of the MVP Joint Venture's limited liability company agreement), a letter of credit or cash collateral. In 2019, EQM issued a performance guarantee of $14 million in favor of the MVP Joint Venture for the MVP Southgate project. As a result of EQM’s credit rating downgrades in the first quarter of 2020, EQM delivered replacement credit support to the MVP Joint Venture, in the form of letters of credit in the amounts of approximately $220.2 million and $14.2 million with respect to the MVP project and MVP Southgate project, respectively. In connection with delivering such letters of credit as replacement performance assurances, EQM's performance guarantees associated with the MVP and MVP Southgate projects were terminated. As of March 31, 2020 , the letters of credit with respect to the MVP project and MVP Southgate project were in the amounts of approximately $220.2 million and $14.2 million , respectively. Upon the FERC’s initial release to begin construction of the MVP Southgate project, EQM’s current letter of credit to support MVP Southgate will be terminated, and EQM will be obligated to deliver a new letter of credit (or provide another allowable form of performance assurance) in an amount equal to 33% of MVP Holdco’s proportionate share of the remaining capital obligations for the MVP Southgate project under the applicable construction budget. As of March 31, 2020 , EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $2,613 million , which consists of the investment in unconsolidated entity balance on the consolidated balance sheet as of March 31, 2020 , net of capital contributions payable, and the letters of credit outstanding under the Amended EQM Credit Facility. The following tables summarize the unaudited condensed consolidated financial statements of the MVP Joint Venture in relation to the MVP project. Condensed Consolidated Balance Sheets March 31, 2020 December 31, 2019 (Thousands) Current assets $ 218,073 $ 102,638 Non-current assets 5,138,016 4,951,521 Total assets $ 5,356,089 $ 5,054,159 Current liabilities $ 195,105 $ 223,645 Equity 5,160,984 4,830,514 Total liabilities and equity $ 5,356,089 $ 5,054,159 Condensed Statements of Consolidated Operations Three Months Ended March 31, 2020 2019 (Thousands) Environmental remediation reserve $ (265 ) $ (2,192 ) Other income 231 2,913 Net interest income 35,326 20,086 AFUDC — equity 82,428 46,868 Net income $ 117,720 $ 67,675 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Equitrans Midstream Term Loan Facility . In December 2018, Equitrans Midstream entered into a term loan credit agreement (as amended in May 2019, the ETRN Term Loan Credit Agreement) that provided for a senior secured term loan facility in an aggregate principal amount of $600 million (the ETRN Term Loans). The Company received net proceeds from the ETRN Term Loans of $568.1 million , inclusive of a discount of $18.0 million and estimated debt issuance costs of $13.9 million . The net proceeds were primarily used to fund the EQGP Buyout, including certain fees, costs and expenses in connection therewith, and the remainder was used for general corporate purposes. On March 3, 2020 , EQM drew $650.0 million under the Amended EQM Credit Facility and transferred such funds to the Company pursuant to a senior unsecured term loan agreement with the Company. The Company utilized a portion of such funds to pay off amounts outstanding under the ETRN Term Loans and the ETRN Term Loan Credit Agreement was terminated. As a result, the Company wrote off $24.4 million of unamortized discount and financing costs related to the ETRN Term Loan Credit Agreement. The write off charge is included in the loss on early extinguishment of debt line on the statements of consolidated comprehensive income. As of December 31, 2019 , the current portion of the ETRN Term Loans was $6.0 million and was recorded in the current portion of long-term debt on the consolidated balance sheet. The Company had $594.0 million of borrowings outstanding and no letters of credit outstanding under the ETRN Term Loan Credit Agreement as of December 31, 2019 . During the period from January 1, 2020 to March 3, 2020 and for the three months ended March 31, 2019 , the weighted average annual interest rates were approximately 6.2% and 6.8% , respectively. Equitrans Midstream Credit Facility. In October 2018, Equitrans Midstream entered into a senior secured revolving credit facility agreement that provided for $100 million in borrowing capacity (the Equitrans Midstream Credit Facility). Equitrans Midstream amended the Equitrans Midstream Credit Facility on December 31, 2018 to, among other things, permit the incurrence of the borrowings under the ETRN Term Loan Credit Agreement. The Equitrans Midstream Credit Facility, which was available for general corporate purposes and to fund ongoing working capital requirements, was terminated on March 3, 2020 in conjunction with the Company's payoff of the ETRN Term Loan Credit Agreement (see below). As a result, the Company wrote off $0.5 million of unamortized financing costs related to the Equitrans Midstream Credit Facility. The write off charge is included in the loss on early extinguishment of debt line on the statements of consolidated comprehensive income. The Company had no borrowings and no letters of credit outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 or during the period from January 1, 2020 to March 3, 2020 . For the three months ended March 31, 2019 , the maximum outstanding borrowings was approximately $44 million , the average daily balance was approximately $12 million , and the weighted average annual interest rate was approximately 4.2% . Commitment fees paid to maintain credit availability under the credit facility were $0.1 million for both the three months ended March 31, 2020 and March 31, 2019 . Amended EQM Revolving Credit Facility and 2019 EQM Term Loan Agreement. On October 31, 2018, EQM amended and restated its unsecured revolving credit facility to increase the borrowing capacity from $1 billion to $3 billion and extend the term to October 2023 (the EQM Credit Facility). In August 2019, EQM entered into a term loan agreement (the 2019 EQM Term Loan Agreement) that provided for unsecured term loans (the EQM Term Loans) in an aggregate principal amount of $1.4 billion . On March 30, 2020 (the Loan Amendment Date), EQM entered into (i) an amendment (the EQM Credit Facility Amendment) to the EQM Credit Facility (as amended by the EQM Credit Facility Amendment, the Amended EQM Credit Facility) and (ii) an amendment (the Term Loan Amendment) to the 2019 EQM Term Loan Agreement (as amended by the Term Loan Amendment, the Amended 2019 EQM Term Loan Agreement). The EQM Credit Facility Amendment and the Term Loan Amendment each amended, among other things: • certain defined terms in the EQM Credit Facility and the 2019 EQM Term Loan Agreement, as applicable, including: ◦ the Applicable Rate (as defined in the respective credit agreements) such that: (i) Base Rate Loans (as defined in the respective credit agreements) bear interest at a Base Rate (as defined in the respective credit agreements) plus a margin of 0.125% to 1.750% for borrowings under the Amended EQM Credit Facility or a margin of 0.000% to 1.625% for borrowings under the Amended 2019 EQM Term Loan Agreement, each determined on the basis of EQM’s then current credit rating, and (ii) Eurodollar Rate Loans (as defined in the respective credit agreements) bear interest at a Eurodollar Rate (as defined in the respective credit agreements) plus a margin of 1.125% to 2.750% for borrowings under the Amended EQM Credit Facility or a margin of 1.000% to 2.625% for borrowings under the Amended 2019 EQM Term Loan Agreement also determined on the basis of EQM’s then current credit rating; and ◦ “Consolidated EBITDA” to allow for adjustment of “Consolidated EBITDA” in any applicable period for the difference between the amount of revenue recognized with respect to all contractual performance obligations and the amount of consideration received with respect to all contractual performance obligations; and • certain negative covenants, including: ◦ the financial covenant pursuant to which, except for certain measurement periods following the consummation of certain acquisitions during which the consolidated leverage ratio cannot exceed the greater of 5.50 to 1.00 or the maximum ratio otherwise permitted for the applicable period, the consolidated leverage ratio cannot exceed, (a) for each fiscal quarter ending prior to the Loan Amendment Date, 5.00 to 1.00, (b) for each fiscal quarter ending on and after the Loan Amendment Date and on or prior to March 31, 2021, 5.75 to 1.00, (c) for each fiscal quarter ending on and after June 30, 2021 and on or prior to December 31, 2021, 5.50 to 1.00, (d) for each fiscal quarter ending on and after March 31, 2022 and on or prior to December 31, 2022, 5.25 to 1.00, and (e) for each fiscal quarter ending on and after March 31, 2023, 5.00 to 1.00; and ◦ the lien covenant such that the specified percentage of Consolidated Net Tangible Assets (as defined in the respective credit agreements) applicable to the existing exception for liens securing obligations not to exceed such specified percentage at the time of creation, incurrence, assumption or imposition of such lien is reduced from 15% to 5% of Consolidated Net Tangible Assets; and ◦ the debt covenant such that the specified percentage of Consolidated Net Tangible Assets applicable to the existing exception for debt incurred by subsidiaries of EQM not to exceed such specified percentage at the time of incurrence is reduced from 15% to 5% of Consolidated Net Tangible Assets. The EQM Credit Facility Amendment also amended various other defined terms, including the definition of "Change of Control", which result in conformity with the Amended 2019 EQM Term Loan Agreement. The Amended EQM Credit Facility is available for general partnership purposes, including to purchase assets, to fund working capital requirements and capital expenditures, to pay distributions and to repurchase units. Subject to satisfaction of certain conditions, the Amended EQM Credit Facility has an accordion feature that allows EQM to increase the available borrowings under the facility by up to an additional $750 million . The Amended EQM Credit Facility has a sublimit of up to $250 million for same-day swing line advances and a sublimit of up to $400 million for letters of credit. In addition, EQM has the ability to request that one or more lenders make available term loans under the Amended EQM Credit Facility, subject to the satisfaction of certain conditions. As of March 31, 2020 , no term loans were outstanding under the Amended EQM Credit Facility. Such term loans would be secured by cash and qualifying investment grade securities. As of March 31, 2020 , EQM had approximately $1,430 million of borrowings and $235 million of letters of credit outstanding under the Amended EQM Credit Facility. As of December 31, 2019 , EQM had approximately $610 million of borrowings and $1 million of letters of credit outstanding under the Amended EQM Credit Facility. During the three months ended March 31, 2020 , the maximum outstanding borrowings at any time were approximately $1,560 million and the average daily balance was approximately $1,027 million . EQM incurred interest at a weighted average annual interest rate of approximately 3.2% for the three months ended March 31, 2020 . During the three months ended March 31, 2019 , the maximum outstanding borrowings at any time were approximately $1.1 billion and the average daily balance was approximately $942 million . EQM incurred interest at a weighted average annual interest rate of approximately 3.9% for the three months ended March 31, 2019 . For the three months ended March 31, 2020 and 2019 , commitment fees of $1.2 million and $1.0 million , respectively, were paid to maintain credit availability under the credit facility. The EQM Term Loans mature in August 2022. EQM received net proceeds from the issuance of the EQM Term Loans of $1,397.4 million , inclusive of debt issuance costs of $2.6 million . The net proceeds were primarily used to repay borrowings under the Amended EQM Credit Facility and the remainder was used for general partnership purposes. The Amended 2019 EQM Term Loan Agreement provides EQM with the right to request incremental term loans in an aggregate amount of up to $300 million , subject to, among other things, obtaining additional commitments from existing lenders or commitments from new lenders. EQM had $1.4 billion of borrowings outstanding under the Amended 2019 EQM Term Loan Agreement as of March 31, 2020 and December 31, 2019 . During the three months ended March 31, 2020 , the weighted average annual interest rate for the period was approximately 3.2% . The Amended EQM Credit Facility and the Amended 2019 EQM Term Loan Agreement each contain certain negative covenants that, among other things, limit restricted payments, the incurrence of debt, dispositions, mergers and fundamental changes, and transactions with affiliates. The EQM Credit Facility Amendment and Term Loan Amendment, as applicable, each added an additional negative covenant, which subject to certain exceptions, limits the ability of EQM and certain of its subsidiaries to enter into agreements that restrict (a) subsidiary dividends and distributions, (b) subsidiary guarantees of the obligations under the Amended EQM Credit Facility or Amended 2019 EQM Term Loan Agreement, or (c) creation of liens to secure obligations under the Amended EQM Credit Facility or the Amended 2019 EQM Term Loan Agreement. In addition, the Amended EQM Credit Facility and Amended 2019 EQM Term Loan Agreement contain certain specified events of default, including, among others, failure to make certain payments (subject to specified grace periods in some cases), failure to observe covenants (subject to specified grace periods in some cases), cross-defaults to certain other material debt, certain specified insolvency or bankruptcy events and the occurrence of a change of control event, in each case, the occurrence of which would allow the lenders to accelerate EQM's payment obligations under the Amended EQM Credit Facility or Amended 2019 EQM Term Loan Agreement. Eureka Credit Facility. Eureka Midstream, LLC (Eureka), a wholly owned subsidiary of Eureka Midstream, has a $400 million senior secured revolving credit facility that is available for general business purposes, including financing maintenance and expansion capital expenditures related to the Eureka system and providing working capital for Eureka’s operations (the Eureka Credit Facility). As of each of March 31, 2020 and December 31, 2019 , Eureka had approximately $293 million of borrowings outstanding under the Eureka Credit Facility. For the three months ended March 31, 2020 , the maximum amount of outstanding borrowings under the Eureka Credit Facility at any time was approximately $293 million , the average daily balance was approximately $293 million and Eureka incurred interest at a weighted average annual interest rate of approximately 3.9% . For the three months ended March 31, 2020 , commitment fees of $0.2 million were paid to maintain credit availability under the credit facility. As of March 31, 2020 , EQM and Eureka were in compliance with all debt provisions and covenants. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets Measured at Fair Value on a Recurring Basis. The Company records derivative instruments at fair value on a gross basis in its consolidated balance sheets. The Henry Hub cash bonus payment provision, as described in Note 6 , is recorded at its estimated fair value based on the quarterly averages of prices of NYMEX Henry Hub natural gas futures prices exceeding certain price thresholds applied to contractual MVCs with the EQT Global GGA, beginning with the first day of the calendar quarter in which the MVP in-service occurs and continuing through the earlier of the last day of the twelfth calendar quarter from that point, or the calendar quarter ending December 31, 2024. The fair value of the Henry Hub cash bonus payment provision is derived using a Monte Carlo simulation model. Significant inputs used in the fair value measurement include NYMEX Henry Hub natural gas futures prices as of the date of valuation, risk-free interest rates based on U.S. Treasury rates, expected volatility of NYMEX Henry Hub futures prices and an estimated credit spread of EQT. The expected volatility of NYMEX Henry Hub futures prices used in the valuation methodology represents a significant unobservable input causing the Henry Hub cash bonus payment provision to be designated as a Level 3 fair value measurement. As of March 31, 2020 , the fair value of the Henry Hub cash bonus payment provision was $55.7 million and is recorded in other assets on the Company's consolidated balance sheets. During the quarter ended March 31, 2020 , the Company recognized a gain of $4.2 million representing the change in estimated fair value of the derivative instrument during the period. The gain is reflected in other income in the Company's statements of consolidated comprehensive income. Other Financial Instruments. The carrying values of cash and cash equivalents, accounts receivable, amounts due to/from related parties and accounts payable approximate fair value due to the short maturity of the instruments; as such, their fair values are Level 1 fair value measurements. The carrying values of borrowings under the Amended EQM Credit Facility, the Eureka Credit Facility and the Amended 2019 EQM Term Loan Agreement approximate fair value as the interest rates are based on prevailing market rates; these are considered Level 1 fair value measurements. As EQM's borrowings under its senior notes are not actively traded, their fair values are estimated using an income approach model that applies a discount rate based on prevailing market rates for debt with similar remaining time-to-maturity and credit risk; as such, their fair values are Level 2 fair value measurements. Effective on March 3, 2020 , the ETRN Term Loans were paid off with proceeds from the Amended EQM Credit Facility (see Note 9 ), and the ETRN Term Loan Credit Agreement was terminated. As of December 31, 2019 , the estimated fair value of the ETRN Term Loans was approximately $595 million and the carrying value of the ETRN Term Loans was approximately $568 million . As of March 31, 2020 and December 31, 2019 , the estimated fair value of EQM's senior notes was approximately $2,267 million and $3,421 million , respectively, and the carrying value of EQM's senior notes was approximately $3,463 million and $3,462 million , respectively. The fair value of the Preferred Interest is a Level 3 fair value measurement and is estimated using an income approach model that applies a market-based discount rate. As of March 31, 2020 and December 31, 2019 , the estimated fair value of the Preferred Interest was approximately $120 million and $126 million , respectively, and the carrying value of the Preferred Interest was approximately $109 million and $110 million , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of the basic and diluted earnings per share attributable to Equitrans Midstream: Three Months Ended March 31, 2020 2019 Basic Diluted Basic Diluted (In thousands, except per share data) Net income $ 189,560 $ 189,560 $ 199,566 $ 199,566 Net income attributable to noncontrolling interests (excluding Series A Preferred Units) 94,327 94,327 143,267 143,267 Series A Preferred Units interest in net income 25,501 25,501 — — Net income attributable to Equitrans Midstream (a) $ 69,732 $ 69,732 $ 56,299 $ 56,299 Basic weighted average common shares outstanding 248,591 248,591 254,776 254,776 Dilutive securities (b) — — — 51 Diluted weighted average common shares outstanding 248,591 248,591 254,776 254,827 Earnings per share attributable to Equitrans Midstream $ 0.28 $ 0.28 $ 0.22 $ 0.22 (a) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate was 9.2% for the three months ended March 31, 2020 , compared to 14.0% for the three months ended March 31, 2019 . The effective tax rate was lower due to the impact of net income attributable to noncontrolling interests and AFUDC on lower income before taxes due to deferred revenue related to the EQT Global GGA and impairment expense. Excluding other items, the effective tax rates for both periods are lower than the statutory rates because the Company does not record income tax expense on the portion of its income attributable to the noncontrolling limited partners of EQM, the noncontrolling member of Eureka Midstream and, for the period prior to the EQGP Buyout, the noncontrolling limited partners of EQGP. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities As of March 31, 2020 , the Company determined EQM to be a variable interest entity. In addition, for the period from January 1, 2019 to January 10, 2019, EQGP was also a variable interest entity. Through the Company's ownership and control of the general partners of EQGP and EQM, the Company had the power to direct the activities that most significantly affected EQGP's and EQM's economic performance during the periods presented. Through the Company's limited partner interests in EQGP prior to the EQGP Buyout, general partner interest in EQGP, limited partner interests and IDRs in EQM prior to the EQM IDR Transaction, and limited partner interests in EQM following the EQM IDR Transaction, the Company had the right to receive benefits from, as well as the obligation to absorb the losses of, EQGP and EQM during the applicable periods. On January 10, 2019, following the completion of the EQGP Buyout, EQGP became a wholly owned subsidiary of the Company. As the Company is the primary beneficiary of and has a controlling financial interest in EQGP and EQM, the Company consolidated EQGP, which, prior to the EQGP Buyout, consolidated EQM for the periods presented. See Note 2 . The Company continues to consolidate EQM and, through EQM, EQGP. The risks associated with the operations of EQM are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as updated by any Quarterly Reports on Form 10-Q. See further discussion of the impact that Equitrans Midstream's ownership and control of EQM had on Equitrans Midstream's financial position, results of operations and cash flows included in Equitrans Midstream's Annual Report on Form 10-K for the year ended December 31, 2019 , as updated by any Quarterly Reports on Form 10-Q, including in the sections captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following table presents assets and liabilities included in the Company's consolidated balance sheets that were for the use or obligation of EQM, inclusive of receivables and payables due from or to related parties. March 31, 2020 December 31, 2019 (Thousands) ASSETS Cash and cash equivalents $ 14,267 $ 15,760 Accounts receivable, net (a) 249,061 254,109 Other current assets 39,279 25,004 Net property, plant and equipment 7,740,231 7,715,122 Investment in unconsolidated entity 2,465,827 2,324,108 Goodwill 486,698 486,698 Net intangible assets 765,205 797,439 Other assets 251,666 196,779 LIABILITIES Accounts payable $ 103,814 $ 126,786 Capital contributions payable to the MVP Joint Venture 87,647 45,150 Accrued interest 44,662 73,366 Accrued liabilities 31,009 31,550 Revolving credit facility borrowings (b) 1,722,500 902,500 EQM long-term debt 4,860,096 4,859,499 Contract liability (c) 247,342 — Regulatory and other long-term liabilities 78,099 78,397 (a) Accounts receivable as of March 31, 2020 and December 31, 2019 included $183.4 million and $175.2 million , respectively, of related party accounts receivable from EQT. (b) As of March 31, 2020 , EQM had credit facility borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (both defined in Note 9 ). As of December 31, 2019 , EQM had credit facility borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. See Note 9 for further detail. (c) Includes approximately $74.3 million of contract liability that is eliminated by the Company in consolidation. The following table summarizes EQM's statements of consolidated operations and cash flows, inclusive of transactions with related parties. Three Months Ended March 31, 2020 2019 (Thousands) Operating revenues $ 453,113 $ 389,782 Operating expenses 201,699 121,768 Other income (expenses), net 3,871 (16,083 ) Net income $ 255,285 $ 251,931 Net cash provided by operating activities $ 285,136 $ 160,973 Net cash used in investing activities $ (845,857 ) $ (350,357 ) Net cash provided by financing activities $ 559,228 $ 245,708 |
Stock-based Compensation Plans
Stock-based Compensation Plans | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Plans | Stock-based Compensation Plans 2020 Performance Share Unit Program. Effective in 2020, the Management Development and Compensation Committee of the Board of Directors of the Company (the Compensation Committee) adopted the 2020 Performance Share Unit Program (2020 PSU Program) under the Equitrans Midstream Corporation 2018 Long-Term Incentive Plan. The 2020 PSU Program was established to align the interests of key employees with the interests of shareholders and the strategic objectives of the Company. During the three months ended March 31, 2020 , a total of 1,164,890 units were granted under the 2020 PSU Program. The vesting of the units under the 2020 PSU Program will occur upon payment after December 31, 2022 (the end of the three-year performance period), assuming continued employment with the Company. The 2020 PSU Program is composed of a Performance Period, which is January 1, 2020 to December 31, 2022, and three Sub-Periods which are the full calendar years of 2020 , 2021 and 2022 . The payout will vary between zero and 200% of the number of outstanding units in the Performance Period and each Sub-Period, contingent upon the level of total shareholder return relative to a predefined peer group during each period. The Performance Period is weighted at 40% and each of the Sub-Periods are weighted at 20% . If earned at the target payout level of 100% , 737,390 of the 2020 PSU Program units are expected to be distributed in Company common stock and 427,500 of the 2020 PSU Program units are expected to be paid in cash. 2020 Restricted Stock and Restricted Stock Unit Awards. During the three months ended March 31, 2020 , the Compensation Committee granted 491,640 restricted stock equity and 337,370 restricted stock unit liability awards. The restricted stock equity awards and restricted stock unit liability awards will be fully vested at the end of the three-year period commencing on January 1, 2020, assuming continued employment with the Company. |
Financial Statements (Policies)
Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. References in these financial statements to Equitrans Midstream or the Company refer collectively to Equitrans Midstream Corporation and, as applicable, its consolidated subsidiaries for all periods presented. The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal, recurring adjustments, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of the Company as of March 31, 2020 and December 31, 2019 , the results of its operations and equity for the three months ended March 31, 2020 and 2019 and its cash flows for the three months ended March 31, 2020 and 2019 . The consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , which includes all disclosures required by GAAP. Due to the seasonal nature of EQM's utility customer contracts, the interim statements for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . For further information, refer to the Company's annual consolidated financial statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this standard eliminated the probable initial recognition threshold in then current GAAP, and, in its place, requires an entity to recognize its current estimate of all expected credit losses. The amendments affected loans, debt securities, trade receivables, contract assets, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of the standard that have the contractual right to receive cash. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326). The update provides entities with targeted transition relief that is intended to increase comparability of financial statement information for some entities that otherwise would have measured similar financial instruments using different measurement methodologies. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The update clarifies and addresses stakeholders' specific issues in ASU 2016-13. The Company adopted the standard on January 1, 2020, using the modified retrospective method for all financial assets recorded at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company's current expected credit loss (CECL) methodology considers risks of collection based on a customer’s current credit status. The standard requires an entity to assess whether financial assets share similar risk characteristics and, if so, group such assets in a pool. Customer balances are aggregated for evaluation based on their credit risk rating, which takes into account changes in economic factors that impact a customer’s ability to meet its financial obligations. The Company's CECL methodology assigns a reserve, even if remote, to each customer based on credit risk. The table below summarizes the changes in the allowance for credit losses by outstanding receivable for the three months ended March 31, 2020 : Accounts Receivable Contract Asset (a) Preferred Interest in EES (b) Total Balance at December 31, 2019 $ (285 ) $ — $ — $ (285 ) Adoption of Topic 326 (2,708 ) — (1,010 ) (3,718 ) Provision for expected credit losses (60 ) (116 ) (11 ) (187 ) Balance at March 31, 2020 $ (3,053 ) $ (116 ) $ (1,021 ) $ (4,190 ) (a) Included in other current assets in the consolidated balance sheets. (b) Included in other assets in the consolidated balance sheets. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes to the hierarchy associated with Level 1, 2 and 3 fair value measurements and the related disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2020. The adoption of this standard did not have an impact on the Company's financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company early-adopted the standard in the first quarter of 2020 with no significant effect on its financial statements or related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) , which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Amended EQM Credit Facility, the Amended 2019 EQM Term Loan Agreement and the Eureka Credit Facility, which use the London Inter-Bank Offered Rate (LIBOR) as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
Financial Statements (Tables)
Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Policy | The table below summarizes the changes in the allowance for credit losses by outstanding receivable for the three months ended March 31, 2020 : Accounts Receivable Contract Asset (a) Preferred Interest in EES (b) Total Balance at December 31, 2019 $ (285 ) $ — $ — $ (285 ) Adoption of Topic 326 (2,708 ) — (1,010 ) (3,718 ) Provision for expected credit losses (60 ) (116 ) (11 ) (187 ) Balance at March 31, 2020 $ (3,053 ) $ (116 ) $ (1,021 ) $ (4,190 ) (a) Included in other current assets in the consolidated balance sheets. (b) Included in other assets in the consolidated balance sheets. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Purchase Price Allocations | (in thousands) Preliminary Purchase Price Allocation (As initially reported) Measurement Period Adjustments (a) Purchase Price Allocation (As adjusted) Consideration given: Cash consideration (b) $ 861,250 $ (11,404 ) $ 849,846 Buyout of portion of Eureka Midstream Class B Units and incentive compensation 2,530 — 2,530 Total consideration 863,780 (11,404 ) 852,376 Fair value of liabilities assumed: Current liabilities 52,458 (9,857 ) 42,601 Long-term debt 300,825 — 300,825 Other long-term liabilities 10,203 — 10,203 Amount attributable to liabilities assumed 363,486 (9,857 ) 353,629 Fair value of assets acquired: Cash 15,145 — 15,145 Accounts receivable 16,817 — 16,817 Inventory 12,991 (26 ) 12,965 Other current assets 882 — 882 Net property, plant and equipment 1,222,284 (8,906 ) 1,213,378 Intangible assets (c) 317,000 (6,000 ) 311,000 Deferred tax asset 5,773 (5,268 ) 505 Other assets 14,567 — 14,567 Amount attributable to assets acquired 1,605,459 (20,200 ) 1,585,259 Noncontrolling interests (486,062 ) 7,602 (478,460 ) Goodwill as of April 10, 2019 $ 107,869 $ (8,663 ) $ 99,206 Impairment of goodwill (d) (99,206 ) Goodwill as of March 31, 2020 $ — (a) The Company recorded measurement period adjustments to its preliminary acquisition date fair values due to the refinement of its valuation models, assumptions and inputs. The measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. (b) The cash consideration for the Bolt-on Acquisition was adjusted by approximately $11.4 million related to working capital adjustments and the release of all escrowed indemnification funds to EQM. (c) After considering the refinements to the valuation models, the Company estimated the fair value of the customer-related intangible assets acquired as part of the Bolt-on Acquisition to be $311.0 million . As a result, the fair value of the customer-related intangible assets was decreased by $6.0 million on September 30, 2019 with a corresponding increase to goodwill. In addition, the change to the provisional amount resulted in a decrease in amortization expense and accumulated amortization of approximately $0.4 million . (d) During the third quarter of 2019, the Company identified impairment indicators that suggested the fair value of its goodwill was more likely than not below its carrying amount. As such, the Company performed an interim goodwill impairment assessment, which resulted in the Company recognizing impairment to goodwill of approximately $268.1 million , of which $99.2 million was associated with its Eureka/Hornet reporting unit, bringing the reporting unit's goodwill balance to zero . |
Financial Information by Busi_2
Financial Information by Business Segment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Operating Income and Reconciliation to Net Income | Three Months Ended March 31, 2020 2019 (Thousands) Revenues from customers: Gathering $ 310,047 $ 261,881 Transmission 106,615 109,859 Water 36,451 18,042 Total operating revenues $ 453,113 $ 389,782 Operating income: Gathering $ 155,228 $ 182,078 Transmission 78,434 84,750 Water 17,752 1,186 Other (a) (9,332 ) (7,973 ) Total operating income $ 242,082 $ 260,041 Reconciliation of operating income to net income: Equity income (b) $ 54,072 $ 31,063 Other income 4,163 1,861 Loss on early extinguishment of debt 24,864 — Net interest expense 66,754 60,949 Income tax expense 19,139 32,450 Net income $ 189,560 $ 199,566 (a) Includes separation and other transaction costs and other operating expenses incurred by the Company separate from and in addition to similar costs incurred by EQM. (b) Equity income is included in the Transmission segment. |
Schedule of Segment Assets | March 31, 2020 December 31, 2019 (Thousands) Segment assets: Gathering $ 7,633,394 $ 7,572,911 Transmission (a) 4,034,646 3,903,707 Water 208,651 202,440 Total operating segments 11,876,691 11,679,058 Headquarters, including cash 312,986 362,651 Total assets $ 12,189,677 $ 12,041,709 (a) The equity investments in the MVP Joint Venture are included in the Transmission segment. |
Schedule of Depreciation and Amortization and Expenditures for Segment Assets | Three Months Ended March 31, 2020 2019 (Thousands) Depreciation: Gathering $ 40,440 $ 28,116 Transmission 13,558 12,533 Water 7,116 6,416 Other 234 3,446 Total $ 61,348 $ 50,511 Capital expenditures for segment assets: Gathering (a) $ 111,454 $ 158,000 Transmission (b) 10,798 18,762 Water 3,476 9,175 Other 1,876 3,396 Total (c) $ 127,604 $ 189,333 (a) Includes approximately $12.5 million of capital expenditures related to the noncontrolling interest in Eureka Midstream for the three months ended March 31, 2020 . (b) Transmission capital expenditures do not include capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $45.2 million and $144.8 million for the three months ended March 31, 2020 and 2019 , respectively. (c) The Company accrues capital expenditures when the work has been completed but the associated bills have not yet been paid. Accrued capital expenditures are excluded from the statements of consolidated cash flows until they are paid. Accrued capital expenditures were approximately $61.0 million and $85.8 million at March 31, 2020 and December 31, 2019 , respectively. Accrued capital expenditures were approximately $89.7 million and $109.3 million at March 31, 2019 and December 31, 2018 , respectively. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue Information, By Segment | The tables below provide disaggregated revenue information by business segment. Three Months Ended March 31, 2020 Gathering Transmission Water Total (Thousands) Firm reservation fee revenues (a) $ 152,079 $ 99,597 $ 12,776 $ 264,452 Volumetric-based fee revenues 157,968 7,018 23,675 188,661 Total operating revenues $ 310,047 $ 106,615 $ 36,451 $ 453,113 Three Months Ended March 31, 2019 Gathering Transmission Water Total (Thousands) Firm reservation fee revenues $ 128,959 $ 99,224 $ 2,884 $ 231,067 Volumetric-based fee revenues 132,922 10,635 15,158 158,715 Total operating revenues $ 261,881 $ 109,859 $ 18,042 $ 389,782 (a) For the three months ended March 31, 2020 , firm reservation fee revenues associated with Gathering and Water included approximately $6.3 million and $5.0 million , respectively, of MVC unbilled revenues. |
Contract with Customer, Asset and Liability | The following table presents changes in the Company's deferred revenue balances during the three months ended March 31, 2020 : Deferred Revenue (Thousands) Balance as of January 1, 2020 $ — Amounts recorded during the period 173,005 Amounts transferred during the period (a) — Balance as of March 31, 2020 $ 173,005 (a) Deferred revenues are recognized as revenue upon satisfaction of the Company's performance obligation to the customer. The following table presents changes in the Company's unbilled revenue balance during the three months ended March 31, 2020 : Unbilled Revenue (Thousands) Balance as of January 1, 2020 $ — Revenue recognized in excess of amounts invoiced 11,305 Minimum volume commitments invoiced (a) — Balance as of March 31, 2020 $ 11,305 |
Summary of Remaining Performance Obligations | Summary of Remaining Performance Obligations. The following table summarizes the estimated transaction price allocated to the Company's remaining performance obligations under all contracts with firm reservation fees and MVCs as of March 31, 2020 that the Company will invoice or transfer from contract liabilities and recognize in future periods. 2020 (a) 2021 2022 2023 2024 Thereafter Total (Thousands) Gathering firm reservation fees $ 76,009 $ 173,406 $ 175,674 $ 173,691 $ 170,621 $ 1,388,240 $ 2,157,641 Gathering revenues supported by MVCs 382,384 570,492 606,232 638,577 633,626 5,356,728 8,188,039 Transmission firm reservation fees 255,426 374,688 371,639 333,315 273,711 2,505,063 4,113,842 Water revenues supported by MVCs 27,017 60,000 60,000 60,000 60,000 60,000 327,017 Total $ 740,836 $ 1,178,586 $ 1,213,545 $ 1,205,583 $ 1,137,958 $ 9,310,031 $ 14,786,539 (a) April 1, 2020 through December 31, 2020. |
Investments in Unconsolidated_2
Investments in Unconsolidated Entity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Unaudited Condensed Financial Statements for the Investment in Unconsolidated Equity | The following tables summarize the unaudited condensed consolidated financial statements of the MVP Joint Venture in relation to the MVP project. Condensed Consolidated Balance Sheets March 31, 2020 December 31, 2019 (Thousands) Current assets $ 218,073 $ 102,638 Non-current assets 5,138,016 4,951,521 Total assets $ 5,356,089 $ 5,054,159 Current liabilities $ 195,105 $ 223,645 Equity 5,160,984 4,830,514 Total liabilities and equity $ 5,356,089 $ 5,054,159 Condensed Statements of Consolidated Operations Three Months Ended March 31, 2020 2019 (Thousands) Environmental remediation reserve $ (265 ) $ (2,192 ) Other income 231 2,913 Net interest income 35,326 20,086 AFUDC — equity 82,428 46,868 Net income $ 117,720 $ 67,675 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the basic and diluted earnings per share attributable to Equitrans Midstream: Three Months Ended March 31, 2020 2019 Basic Diluted Basic Diluted (In thousands, except per share data) Net income $ 189,560 $ 189,560 $ 199,566 $ 199,566 Net income attributable to noncontrolling interests (excluding Series A Preferred Units) 94,327 94,327 143,267 143,267 Series A Preferred Units interest in net income 25,501 25,501 — — Net income attributable to Equitrans Midstream (a) $ 69,732 $ 69,732 $ 56,299 $ 56,299 Basic weighted average common shares outstanding 248,591 248,591 254,776 254,776 Dilutive securities (b) — — — 51 Diluted weighted average common shares outstanding 248,591 248,591 254,776 254,827 Earnings per share attributable to Equitrans Midstream $ 0.28 $ 0.28 $ 0.22 $ 0.22 (a) For all periods presented, the impact of EQM's dilutive securities did not have a material impact on the Company's diluted earnings per share. (b) For the three months ended March 31, 2020 , the Company excluded 521,722 potentially dilutive securities because the impact would have been anti-dilutive. |
Consolidated Variable Interes_2
Consolidated Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Consolidated Variable Interest Entity | The following table presents assets and liabilities included in the Company's consolidated balance sheets that were for the use or obligation of EQM, inclusive of receivables and payables due from or to related parties. March 31, 2020 December 31, 2019 (Thousands) ASSETS Cash and cash equivalents $ 14,267 $ 15,760 Accounts receivable, net (a) 249,061 254,109 Other current assets 39,279 25,004 Net property, plant and equipment 7,740,231 7,715,122 Investment in unconsolidated entity 2,465,827 2,324,108 Goodwill 486,698 486,698 Net intangible assets 765,205 797,439 Other assets 251,666 196,779 LIABILITIES Accounts payable $ 103,814 $ 126,786 Capital contributions payable to the MVP Joint Venture 87,647 45,150 Accrued interest 44,662 73,366 Accrued liabilities 31,009 31,550 Revolving credit facility borrowings (b) 1,722,500 902,500 EQM long-term debt 4,860,096 4,859,499 Contract liability (c) 247,342 — Regulatory and other long-term liabilities 78,099 78,397 (a) Accounts receivable as of March 31, 2020 and December 31, 2019 included $183.4 million and $175.2 million , respectively, of related party accounts receivable from EQT. (b) As of March 31, 2020 , EQM had credit facility borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (both defined in Note 9 ). As of December 31, 2019 , EQM had credit facility borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. See Note 9 for further detail. (c) Includes approximately $74.3 million of contract liability that is eliminated by the Company in consolidation. The following table summarizes EQM's statements of consolidated operations and cash flows, inclusive of transactions with related parties. Three Months Ended March 31, 2020 2019 (Thousands) Operating revenues $ 453,113 $ 389,782 Operating expenses 201,699 121,768 Other income (expenses), net 3,871 (16,083 ) Net income $ 255,285 $ 251,931 Net cash provided by operating activities $ 285,136 $ 160,973 Net cash used in investing activities $ (845,857 ) $ (350,357 ) Net cash provided by financing activities $ 559,228 $ 245,708 |
Financial Statements (Details)
Financial Statements (Details) $ in Millions | Feb. 26, 2020USD ($) | Nov. 12, 2018 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Cash distributions paid (as a percent) | 80.10% | |
Series A Preferred Units | EQM Merger | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Redemptions | $ 600 | |
Redemption percentage rate | 1.01 | |
Preferred Stock | EQM Merger | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Redemption percentage rate | 2.44 | |
EQT Corporation and Subsidiaries | Equitrans Midstream | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Limited partner ownership interest (as a percent) | 19.90% |
Financial Statements - Impact o
Financial Statements - Impact of Adoption (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | $ (285) |
Provision for expected credit losses | (187) |
Balance at March 31, 2020 | (4,190) |
Cumulative Effect, Period of Adoption, Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | (3,718) |
Accounts Receivable | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | (285) |
Provision for expected credit losses | (60) |
Balance at March 31, 2020 | (3,053) |
Accounts Receivable | Cumulative Effect, Period of Adoption, Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | (2,708) |
Contract Asset | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | 0 |
Provision for expected credit losses | (116) |
Balance at March 31, 2020 | (116) |
Contract Asset | Cumulative Effect, Period of Adoption, Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | 0 |
Preferred Interest in EES | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | 0 |
Provision for expected credit losses | (11) |
Balance at March 31, 2020 | (1,021) |
Preferred Interest in EES | Cumulative Effect, Period of Adoption, Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle | |
Balance at December 31, 2019 | $ (1,010) |
Investments in Consolidated, _2
Investments in Consolidated, Non-Wholly-Owed Entities (Details) $ / shares in Units, $ in Thousands | Apr. 27, 2020USD ($)$ / shares | Feb. 26, 2020USD ($)day$ / sharesshares | Mar. 31, 2019USD ($) | Mar. 13, 2019USD ($)$ / sharesshares | Feb. 13, 2019shares | Jan. 10, 2019USD ($)$ / sharesshares | Jan. 03, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Mar. 31, 2020USD ($)shares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) |
Class of Stock | |||||||||||
Results of the EQGP Buyout and the EQM IDR Transaction | $ | $ 346,543 | ||||||||||
Decrease in deferred tax asset | $ | 346,500 | ||||||||||
Convertible basis (percentage) | 100.00% | ||||||||||
Convertible units | $ | $ 20,000 | ||||||||||
Trading price threshold (per unit) | $ / shares | $ 27.99 | ||||||||||
Threshold trading days | day | 20 | ||||||||||
Threshold amount of stock price trigger (in shares) | 1,000,000 | ||||||||||
Threshold consecutive trading days | day | 20 | ||||||||||
Initial purchase price for the shared assets transaction | $ | $ 49,700 | ||||||||||
Cash consideration | $ | $ 152,392 | $ 8,900 | 208,966 | ||||||||
Conversion price (usd per unit) | $ / shares | $ 19.99 | ||||||||||
Threshold percentage of consideration payable trigger, conversion ratio (percentage) | 110.00% | ||||||||||
Minimum | |||||||||||
Class of Stock | |||||||||||
Threshold percentage of consideration payable trigger (percentage) | 90.00% | ||||||||||
Threshold percentage of consideration payable trigger, redemption covenant (percentage) | 101.00% | ||||||||||
Threshold percentage of consideration payable trigger, volume weighted average price covenant (percentage) | 95.00% | ||||||||||
Series A Preferred Units | EQM Merger | |||||||||||
Class of Stock | |||||||||||
Redemptions | $ | $ 600,000 | ||||||||||
Redemption percentage rate | 1.01 | ||||||||||
Preferred Stock | EQM Merger | |||||||||||
Class of Stock | |||||||||||
Redemption percentage rate | 2.44 | ||||||||||
EQM | Subsequent Event | |||||||||||
Class of Stock | |||||||||||
Cash distributions declared (in dollars per unit) | $ / shares | $ 0.3875 | ||||||||||
EQM | Series A Preferred Units | |||||||||||
Class of Stock | |||||||||||
Cash purchase price for Series A Preferred Units (in dollars per share) | $ / shares | $ 48.77 | ||||||||||
Cumulative quarterly distribution increasing percentage (A) | 2.59% | ||||||||||
Cumulative quarterly distribution increasing percentage (B) | 6.90% | ||||||||||
Cumulative quarterly distribution increasing percentage (C) | 25.00% | ||||||||||
Cash distributions declared (in dollars per unit) | $ / shares | $ 1.0364 | ||||||||||
EQM | Series A Preferred Units | Subsequent Event | |||||||||||
Class of Stock | |||||||||||
Cash distributions declared (in dollars per unit) | $ / shares | $ 1.0364 | ||||||||||
EQM | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Canceled common units (in shares) | 21,811,643 | ||||||||||
EQM | Limited Partner | Subsequent Event | |||||||||||
Class of Stock | |||||||||||
Distributions paid to noncontrolling interest unitholders | $ | $ 45,400 | ||||||||||
EQGP | Phantom Share Units (PSUs) | |||||||||||
Class of Stock | |||||||||||
Units paid in connection with EQGP Buyout (in dollars per share) | $ / shares | $ 20 | ||||||||||
Units paid in connection with EQGP Buyout (in shares) | 29,829 | ||||||||||
Common Stock | |||||||||||
Class of Stock | |||||||||||
Results of the EQGP Buyout and the EQM IDR Transaction | $ | (991,098) | ||||||||||
Noncontrolling Interests | |||||||||||
Class of Stock | |||||||||||
Results of the EQGP Buyout and the EQM IDR Transaction | $ | $ 1,337,641 | ||||||||||
EQGP | |||||||||||
Class of Stock | |||||||||||
Debt terminated | $ | $ 20,000 | ||||||||||
EQM | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 117,245,455 | ||||||||||
Limited partner ownership interest (as a percent) | 59.90% | ||||||||||
EQM | Common Class B | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 7,000,000 | ||||||||||
EQM | EQGP | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Partners' capital common units outstanding (in shares) | 21,811,643 | ||||||||||
EQM | Equitrans Gathering Holdings, LLC | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 89,505,616 | ||||||||||
EQM | Equitrans Gathering Holdings, LLC | Common Class B | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 6,153,907 | ||||||||||
EQM | EQM GP Corporation | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 89,536 | ||||||||||
EQM | EQM GP Corporation | Common Class B | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 6,155 | ||||||||||
EQM | Equitrans Midstream Holdings, LLC | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 27,650,303 | ||||||||||
EQM | Equitrans Midstream Holdings, LLC | Common Class B | Limited Partner Common | |||||||||||
Class of Stock | |||||||||||
Common units held (in shares) | 839,938 | ||||||||||
EQM | Public Owned | |||||||||||
Class of Stock | |||||||||||
Limited partner ownership interest (as a percent) | 40.10% | ||||||||||
EQGP Unit Purchases | |||||||||||
Class of Stock | |||||||||||
Aggregate purchase price of EQGP Unit Purchases | $ | $ 16,100 | $ 291,200 | |||||||||
EQGP Unit Purchases | EQGP | |||||||||||
Class of Stock | |||||||||||
Aggregate common units of EQGP Unit Purchases (in shares) | 804,140 | 14,560,281 | |||||||||
Limited Call Right | |||||||||||
Class of Stock | |||||||||||
Aggregate purchase price of EQGP Unit Purchases | $ | $ 221,900 | ||||||||||
Limited Call Right | EQGP | |||||||||||
Class of Stock | |||||||||||
Aggregate common units of EQGP Unit Purchases (in shares) | 11,097,287 | ||||||||||
IDR Merger Agreement | |||||||||||
Class of Stock | |||||||||||
Units convertible as of April 1, 2021 (in shares) | 2,500,000 | ||||||||||
Units convertible as of April 1, 2022 (in shares) | 2,500,000 | ||||||||||
Units convertible as of April 1, 2023 (in shares) | 2,000,000 | ||||||||||
IDR Merger Agreement | EQM | |||||||||||
Class of Stock | |||||||||||
Common units received (in shares) | 80,000,000 | ||||||||||
IDR Merger Agreement | EQM | Common Class B | |||||||||||
Class of Stock | |||||||||||
Common units received (in shares) | 7,000,000 | ||||||||||
Private Placement | |||||||||||
Class of Stock | |||||||||||
Cumulative quarterly distribution increasing percentage (A) | 8.15% | ||||||||||
Cumulative quarterly dividend rate (percentage) | 9.75% | ||||||||||
Private Placement | Minimum | |||||||||||
Class of Stock | |||||||||||
Cumulative quarterly dividend rate (percentage) | 10.50% | ||||||||||
Private Placement | EQM | |||||||||||
Class of Stock | |||||||||||
Aggregate number of units owned (in shares) | 24,605,291 | ||||||||||
Total gross proceeds for Series A Preferred Units | $ | $ 1,200,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | Mar. 31, 2020USD ($) | Feb. 26, 2020USD ($) | Apr. 10, 2019USD ($)mi | Mar. 13, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Business Acquisition | ||||||
Transaction costs | $ 11,360,000 | $ 8,782,000 | ||||
EQM Merger | ||||||
Business Acquisition | ||||||
Conversion, right to receive common shares (in dollars per unit) | 2.44 | |||||
Maximum merger expense reimbursement | $ 10,000,000 | |||||
Transaction costs | 11,400,000 | |||||
EQM Merger | EQM | ||||||
Business Acquisition | ||||||
Merger termination fee | 36,500,000 | |||||
Maximum merger expense reimbursement | 10,000,000 | |||||
EQM Merger | Series A Preferred Units | ||||||
Business Acquisition | ||||||
Redemptions | $ 600,000,000 | |||||
Redemption percentage rate | 1.01 | |||||
Eureka Midstream Holdings, LLC | ||||||
Business Acquisition | ||||||
Length of gathering lines (in miles) | mi | 190 | |||||
Eureka Midstream Holdings, LLC | EQM | ||||||
Business Acquisition | ||||||
Limited partner ownership interest (as a percent) | 60.00% | |||||
Hornet Midstream Holdings, LLC | ||||||
Business Acquisition | ||||||
Length of gathering lines (in miles) | mi | 15 | |||||
Hornet Midstream Holdings, LLC | EQM | ||||||
Business Acquisition | ||||||
Limited partner ownership interest (as a percent) | 100.00% | |||||
Bolt-on Acquisition | ||||||
Business Acquisition | ||||||
Cash consideration | $ 852,376,000 | $ 863,780,000 | ||||
Goodwill prior to impairment adjustment | $ 99,206,000 | $ 99,200,000 | $ 99,206,000 | |||
Bolt-on Acquisition | EQM | ||||||
Business Acquisition | ||||||
Total consideration | $ 1,040,000,000 | |||||
Cash consideration | 852,000,000 | |||||
Assumed pro-rata debt | $ 192,000,000 |
Acquisitions - Schedule of Prel
Acquisitions - Schedule of Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Apr. 10, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2020 |
Goodwill | ||||||
Goodwill as of April 10, 2019 | $ 486,698 | |||||
Impairment of goodwill | $ (268,100) | |||||
Goodwill as of March 31, 2020 | $ 486,698 | 486,698 | $ 486,698 | |||
Decrease in amortization expense | (14,581) | $ (10,387) | ||||
Bolt-on Acquisition | ||||||
Consideration given: | ||||||
Cash consideration | 849,846 | $ 861,250 | ||||
Buyout of portion of Eureka Midstream Class B Units and incentive compensation | 2,530 | 2,530 | ||||
Total consideration | 852,376 | 863,780 | ||||
Fair value of liabilities assumed: | ||||||
Current liabilities | 42,601 | 52,458 | 42,601 | 42,601 | ||
Long-term debt | 300,825 | 300,825 | 300,825 | 300,825 | ||
Other long-term liabilities | 10,203 | 10,203 | 10,203 | 10,203 | ||
Amount attributable to liabilities assumed | 353,629 | 363,486 | 353,629 | 353,629 | ||
Fair value of assets acquired: | ||||||
Cash | 15,145 | 15,145 | 15,145 | 15,145 | ||
Accounts receivable | 16,817 | 16,817 | 16,817 | 16,817 | ||
Inventory | 12,965 | 12,991 | 12,965 | 12,965 | ||
Other current assets | 882 | 882 | 882 | 882 | ||
Net property, plant and equipment | 1,213,378 | 1,222,284 | 1,213,378 | 1,213,378 | ||
Intangible assets | 311,000 | 317,000 | 311,000 | 311,000 | ||
Deferred tax asset | 505 | 5,773 | 505 | 505 | ||
Other assets | 14,567 | 14,567 | 14,567 | 14,567 | ||
Amount attributable to assets acquired | 1,585,259 | 1,605,459 | 1,585,259 | 1,585,259 | ||
Noncontrolling interests | (478,460) | (486,062) | (478,460) | (478,460) | ||
Measurement Period Adjustments | ||||||
Total consideration | (11,404) | |||||
Current liabilities | (9,857) | |||||
Amount attributable to liabilities assumed | (9,857) | |||||
Inventory | (26) | |||||
Net property, plant and equipment | (8,906) | |||||
Intangible assets | (6,000) | |||||
Deferred tax asset | (5,268) | |||||
Amount attributable to assets acquired | (20,200) | |||||
Noncontrolling interests | 7,602 | |||||
Goodwill as of April 10, 2019 | (8,663) | |||||
Goodwill prior to impairment adjustment | 99,206 | 99,200 | 99,206 | 99,206 | ||
Goodwill | ||||||
Impairment of goodwill | (99,206) | |||||
Goodwill as of March 31, 2020 | $ 0 | $ 107,869 | $ 0 | $ 0 | 0 | |
Decrease in amortization expense | $ 400 |
Impairments of Long-Lived Ass_2
Impairments of Long-Lived Assets and Other-Than-Temporary Decline in Value (Details) $ in Millions | Feb. 26, 2020reporting_unitsegment | Feb. 25, 2020reporting_unitsegment | Mar. 31, 2020USD ($) |
Property, Plant and Equipment | |||
Number of operating segments (segments) | segment | 3 | 3 | |
Number of reporting units (reporting units) | reporting_unit | 6 | 7 | |
Gathering | |||
Property, Plant and Equipment | |||
Impairment of property and equipment | $ 37.9 | ||
Impairment of Hornet-related intangible assets | $ 17.7 |
Financial Information by Busi_3
Financial Information by Business Segment - Narrative (Details) $ in Thousands | Feb. 26, 2020segment | Feb. 25, 2020segment | Mar. 31, 2020USD ($)business_line | Mar. 31, 2019USD ($) | Apr. 30, 2020facilitymi | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Segment Information | |||||||
Number of operating segments (segments) | segment | 3 | 3 | |||||
Number of lines of business | business_line | 3 | ||||||
Expenditure for segment assets | $ 127,604 | $ 189,333 | |||||
Accrued capital expenditures | 61,000 | 89,700 | $ 85,800 | $ 109,300 | |||
Operating segments | Gathering | |||||||
Segment Information | |||||||
Expenditure for segment assets | 111,454 | 158,000 | |||||
Operating segments | Gathering | Eureka Midstream Holdings, LLC | |||||||
Segment Information | |||||||
Expenditure for segment assets | 12,500 | ||||||
Operating segments | Transmission | |||||||
Segment Information | |||||||
Expenditure for segment assets | 10,798 | 18,762 | |||||
Operating segments | Transmission | MVP Southgate Project | |||||||
Segment Information | |||||||
Expenditure for segment assets | $ 45,200 | $ 144,800 | |||||
Subsequent Event | |||||||
Segment Information | |||||||
Non-core miles (miles) | mi | 927 | ||||||
Compressor station facilities (facility) | facility | 11 |
Financial Information by Busi_4
Financial Information by Business Segment - Schedule of Segment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Revenues from customers: | |||
Operating revenues | [1] | $ 453,113 | $ 389,782 |
Operating income: | |||
Total operating income | 242,082 | 260,041 | |
Reconciliation of operating income to net income: | |||
Equity income | [2],[3] | 54,072 | 31,063 |
Other income (e) | [4] | 4,163 | 1,861 |
Loss on early extinguishment of debt | 24,864 | 0 | |
Net interest expense | [5] | 66,754 | 60,949 |
Income tax expense | 19,139 | 32,450 | |
Net income | 189,560 | 199,566 | |
Gathering | |||
Revenues from customers: | |||
Operating revenues | 310,047 | 261,881 | |
Transmission | |||
Revenues from customers: | |||
Operating revenues | 106,615 | 109,859 | |
Water | |||
Revenues from customers: | |||
Operating revenues | 36,451 | 18,042 | |
Operating segments | Gathering | |||
Revenues from customers: | |||
Operating revenues | 310,047 | 261,881 | |
Operating income: | |||
Total operating income | 155,228 | 182,078 | |
Operating segments | Transmission | |||
Revenues from customers: | |||
Operating revenues | 106,615 | 109,859 | |
Operating income: | |||
Total operating income | 78,434 | 84,750 | |
Operating segments | Water | |||
Revenues from customers: | |||
Operating revenues | 36,451 | 18,042 | |
Operating income: | |||
Total operating income | 17,752 | 1,186 | |
Other | |||
Operating income: | |||
Total operating income | $ (9,332) | $ (7,973) | |
[1] | Operating revenues included related party revenues from EQT of approximately $303.8 million and $284.5 million for the three months ended March 31, 2020 and 2019 , respectively. See Note 7 . | ||
[2] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||
[3] | Represents equity income from the MVP Joint Venture. See Note 8 . | ||
[4] | See Note 10 for disclosures regarding derivative instruments. | ||
[5] | Net interest expense included interest income on the Preferred Interest in EES of approximately $1.5 million and $1.6 million for the three months ended March 31, 2020 and 2019 , respectively. |
Financial Information by Busi_5
Financial Information by Business Segment - Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Long-Lived Assets | ||
Total assets | $ 12,189,677 | $ 12,041,709 |
Operating segments | ||
Long-Lived Assets | ||
Total assets | 11,876,691 | 11,679,058 |
Operating segments | Gathering | ||
Long-Lived Assets | ||
Total assets | 7,633,394 | 7,572,911 |
Operating segments | Transmission | ||
Long-Lived Assets | ||
Total assets | 4,034,646 | 3,903,707 |
Operating segments | Water | ||
Long-Lived Assets | ||
Total assets | 208,651 | 202,440 |
Other/Headquarters, including cash | ||
Long-Lived Assets | ||
Total assets | $ 312,986 | $ 362,651 |
Financial Information by Busi_6
Financial Information by Business Segment - Depreciation and Capital Expenditures for Segment Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Information | ||
Depreciation | $ 61,348 | $ 50,511 |
Expenditure for segment assets | 127,604 | 189,333 |
Operating segments | Gathering | ||
Segment Information | ||
Depreciation | 40,440 | 28,116 |
Expenditure for segment assets | 111,454 | 158,000 |
Operating segments | Transmission | ||
Segment Information | ||
Depreciation | 13,558 | 12,533 |
Expenditure for segment assets | 10,798 | 18,762 |
Operating segments | Water | ||
Segment Information | ||
Depreciation | 7,116 | 6,416 |
Expenditure for segment assets | 3,476 | 9,175 |
Other | ||
Segment Information | ||
Depreciation | 234 | 3,446 |
Expenditure for segment assets | $ 1,876 | $ 3,396 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Disaggregated Revenue Information, by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Disaggregation of Revenue | |||
Operating revenues | [1] | $ 453,113 | $ 389,782 |
Firm reservation fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 264,452 | 231,067 | |
Volumetric-based fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 188,661 | 158,715 | |
Gathering | |||
Disaggregation of Revenue | |||
Operating revenues | 310,047 | 261,881 | |
Gathering | Firm reservation fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 152,079 | 128,959 | |
Gathering | Firm reservation fee revenues | MVC | |||
Disaggregation of Revenue | |||
Operating revenues | 6,300 | ||
Gathering | Volumetric-based fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 157,968 | 132,922 | |
Transmission | |||
Disaggregation of Revenue | |||
Operating revenues | 106,615 | 109,859 | |
Transmission | Firm reservation fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 99,597 | 99,224 | |
Transmission | Volumetric-based fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 7,018 | 10,635 | |
Water | |||
Disaggregation of Revenue | |||
Operating revenues | 36,451 | 18,042 | |
Water | Firm reservation fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 12,776 | 2,884 | |
Water | Volumetric-based fee revenues | |||
Disaggregation of Revenue | |||
Operating revenues | 23,675 | $ 15,158 | |
Water | Volumetric-based fee revenues | MVC | |||
Disaggregation of Revenue | |||
Operating revenues | $ 5,000 | ||
[1] | Operating revenues included related party revenues from EQT of approximately $303.8 million and $284.5 million for the three months ended March 31, 2020 and 2019 , respectively. See Note 7 . |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Unbilled Revenue Rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change in Contract with Customer, Asset | |
Balance as of January 1, 2020 | $ 0 |
Revenue recognized in excess of amounts invoiced | 11,305 |
Minimum volume commitments invoiced | 0 |
Balance as of March 31, 2020 | $ 11,305 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Deferred Revenue Rollforward (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change in Contract with Customer, Liability | |
Balance as of January 1, 2020 | $ 0 |
Amounts recorded during the period | 173,005,000 |
Amounts transferred during the period | 0 |
Balance as of March 31, 2020 | $ 173,005,000 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Summary of Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 14,786,539 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 740,836 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 1,178,586 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 1,213,545 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 1,205,583 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 1,137,958 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 9,310,031 |
Transmission firm reservation fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 4,113,842 |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 255,426 |
Remaining performance obligations, expected timing | 9 months |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 374,688 |
Remaining performance obligations, expected timing | 1 year |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 371,639 |
Remaining performance obligations, expected timing | 1 year |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 333,315 |
Remaining performance obligations, expected timing | 1 year |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 273,711 |
Remaining performance obligations, expected timing | 1 year |
Transmission firm reservation fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 2,505,063 |
Remaining performance obligations, expected timing | |
Water | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 327,017 |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 27,017 |
Remaining performance obligations, expected timing | 9 months |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 60,000 |
Remaining performance obligations, expected timing | 1 year |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 60,000 |
Remaining performance obligations, expected timing | 1 year |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 60,000 |
Remaining performance obligations, expected timing | 1 year |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 60,000 |
Remaining performance obligations, expected timing | 1 year |
Water | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 60,000 |
Remaining performance obligations, expected timing | |
Gathering firm reservation fees | Gathering | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 2,157,641 |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 76,009 |
Remaining performance obligations, expected timing | 9 months |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 173,406 |
Remaining performance obligations, expected timing | 1 year |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 175,674 |
Remaining performance obligations, expected timing | 1 year |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 173,691 |
Remaining performance obligations, expected timing | 1 year |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 170,621 |
Remaining performance obligations, expected timing | 1 year |
Gathering firm reservation fees | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 1,388,240 |
Remaining performance obligations, expected timing | |
Gathering revenues supported by MVCs | Gathering | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 8,188,039 |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 382,384 |
Remaining performance obligations, expected timing | 9 months |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 570,492 |
Remaining performance obligations, expected timing | 1 year |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 606,232 |
Remaining performance obligations, expected timing | 1 year |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 638,577 |
Remaining performance obligations, expected timing | 1 year |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 633,626 |
Remaining performance obligations, expected timing | 1 year |
Gathering revenues supported by MVCs | Gathering | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 5,356,728 |
Remaining performance obligations, expected timing |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Total (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 14,786,539 |
Gathering | Gathering firm reservation fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 2,157,641 |
Gathering | Gathering revenues supported by MVCs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 8,188,039 |
Transmission firm reservation fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | 4,113,842 |
Water | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Total | $ 327,017 |
Revenue from Contracts with C_8
Revenue from Contracts with Customers - Narrative (Details) | Mar. 05, 2020USD ($)shares | Feb. 26, 2020USD ($)agreementBcf | Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)shares | |
Disaggregation of Revenue | ||||||
Derivative instrument, at fair value | $ 55,700,000 | |||||
Estimated aggregate fee relief, year one | $ 270,000,000 | |||||
Estimated aggregate fee relief, year two | 230,000,000 | |||||
Estimated aggregate fee relief, year three | 35,000,000 | |||||
Option to forgo fee relief, year one | 145,000,000 | |||||
Option to forgo fee relief, year two | 90,000,000 | |||||
Cash payment to be made in exchange for fee relief | 196,000,000 | |||||
Contract liability | $ 121,500,000 | 173,005,000 | $ 0 | |||
Deferred revenue (non-current amount) | [1] | 173,005,000 | $ 0 | |||
Revenue recognized from contract liability | 0 | |||||
Number of shares purchased | 190,992,000 | $ 238,455,000 | ||||
Deferred tax liability | $ 17,200,000 | |||||
Shares owned (shares) | shares | 229,352,000 | 254,745,000 | ||||
EQM | ||||||
Disaggregation of Revenue | ||||||
Number of share purchase agreements (agreements) | agreement | 2 | |||||
Common Stock, Cash Shares | ||||||
Disaggregation of Revenue | ||||||
Number of shares purchased (in shares) | shares | 4,769,496 | |||||
Common Stock, Rate Relief Shares And Cash Shares | ||||||
Disaggregation of Revenue | ||||||
Number of shares purchased (in shares) | shares | 20,530,256 | |||||
Share Purchase Agreement | Common Stock, Cash Shares | ||||||
Disaggregation of Revenue | ||||||
Number of shares purchased | $ 46,000,000 | |||||
Affiliated Entity | Water Services Letter Agreement | ||||||
Disaggregation of Revenue | ||||||
Fees incurred for services | $ 60,000,000 | |||||
EQT Corporation and Subsidiaries | ||||||
Disaggregation of Revenue | ||||||
Firm reservation capacity (per day) | Bcf | 3 | |||||
Firm reservation capacity, step up (per day) | Bcf | 4 | |||||
Derivative instrument, at fair value | $ 51,500,000 | |||||
EQT Corporation and Subsidiaries | Equitrans Midstream | ||||||
Disaggregation of Revenue | ||||||
Shares owned (shares) | shares | 25,299,751 | |||||
EQT Corporation and Subsidiaries | Share Purchase Agreement | ||||||
Disaggregation of Revenue | ||||||
Number of shares purchased | 7,000,000 | |||||
EQT Corporation and Subsidiaries | Share Purchase Agreement | Common Stock, Rate Relief Shares And Cash Shares | ||||||
Disaggregation of Revenue | ||||||
Number of shares purchased | $ 196,000,000 | |||||
Gathering | ||||||
Disaggregation of Revenue | ||||||
Weighted average remaining term | 15 years | |||||
Transmission | ||||||
Disaggregation of Revenue | ||||||
Weighted average remaining term | 14 years | |||||
[1] | See Note 6 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2020 | Feb. 26, 2020 | Dec. 31, 2019 |
Related Party Transaction | |||
Shares owned (shares) | 229,352,000 | 254,745,000 | |
EQT Corporation and Subsidiaries | EQM | Affiliated Entity | |||
Related Party Transaction | |||
Maximum borrowing capacity | $ 250,000,000 | ||
EQT Corporation and Subsidiaries | Equitrans Midstream | |||
Related Party Transaction | |||
Shares owned (shares) | 25,299,751 | ||
Ownership interest (as a percent) | 11.00% |
Investments in Unconsolidated_3
Investments in Unconsolidated Entity - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020USD ($) | May 31, 2020USD ($) | Apr. 30, 2020USD ($) | Feb. 29, 2020USD ($) | Mar. 31, 2020USD ($)mi | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 04, 2019USD ($) | Apr. 30, 2018mi | |
Con Edison | Maximum | |||||||||
Schedule of Equity Method Investments | |||||||||
Equity Method Investments, Capped Investment | $ 530 | ||||||||
MVP Joint Venture | |||||||||
Schedule of Equity Method Investments | |||||||||
Letter of credit outstanding | $ 220.2 | ||||||||
MVP Joint Venture | Beneficial Owner | |||||||||
Schedule of Equity Method Investments | |||||||||
Percentage of ownership interest (percentage) | 66.67% | ||||||||
MVP Joint Venture | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments | |||||||||
Maximum financial statement exposure | $ 2,613 | ||||||||
MVP Joint Venture | Variable Interest Entity, Not Primary Beneficiary | Scenario, Forecast | |||||||||
Schedule of Equity Method Investments | |||||||||
Payments to joint venture | $ 86 | ||||||||
MVP Joint Venture | Variable Interest Entity, Not Primary Beneficiary | EQM | |||||||||
Schedule of Equity Method Investments | |||||||||
Ownership interest (as a percent) | 45.70% | ||||||||
MVP Joint Venture | Variable Interest Entity, Not Primary Beneficiary | EQM | Scenario, Forecast | |||||||||
Schedule of Equity Method Investments | |||||||||
Ownership interest (as a percent) | 47.00% | ||||||||
MVP Southgate Project | |||||||||
Schedule of Equity Method Investments | |||||||||
Letter of credit outstanding | $ 14.2 | ||||||||
MVP Southgate Project | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments | |||||||||
Ownership interest (as a percent) | 47.20% | ||||||||
MVP Project | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments | |||||||||
Capital contribution payable to MVP Joint Venture | $ 87.4 | ||||||||
MVP Project | Variable Interest Entity, Not Primary Beneficiary | Scenario, Forecast | |||||||||
Schedule of Equity Method Investments | |||||||||
Payments to joint venture | $ 54.2 | $ 23.2 | |||||||
MVP Project | Variable Interest Entity, Not Primary Beneficiary | Subsequent Event | |||||||||
Schedule of Equity Method Investments | |||||||||
Payments to joint venture | $ 10 | ||||||||
MVP | |||||||||
Schedule of Equity Method Investments | |||||||||
Length of pipeline (in miles) | mi | 300 | ||||||||
MVP | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments | |||||||||
Issuance of performance guarantee, remaining capital obligation, percentage | 33.00% | ||||||||
Issuance of performance guarantee | $ 223 | ||||||||
MVP Southgate Project | |||||||||
Schedule of Equity Method Investments | |||||||||
Length of pipeline (in miles) | mi | 75 | ||||||||
MVP Southgate Project | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Schedule of Equity Method Investments | |||||||||
Issuance of performance guarantee | $ 14 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entity - Balance Sheet for the Investment in Unconsolidated Equity (Details) - MVP Joint Venture - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Current assets | $ 218,073 | $ 102,638 |
Non-current assets | 5,138,016 | 4,951,521 |
Total assets | 5,356,089 | 5,054,159 |
Current liabilities | 195,105 | 223,645 |
Equity | 5,160,984 | 4,830,514 |
Total liabilities and equity | $ 5,356,089 | $ 5,054,159 |
Investments in Unconsolidated_5
Investments in Unconsolidated Entity - Income Statement for the Investment in Unconsolidated Equity (Details) - MVP Joint Venture - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Statements of Consolidated Operations | ||
Environmental remediation reserve | $ (265) | $ (2,192) |
Other income | 231 | 2,913 |
Net interest income | 35,326 | 20,086 |
AFUDC — equity | 82,428 | 46,868 |
Net income | $ 117,720 | $ 67,675 |
Debt - Equitrans Midstream Term
Debt - Equitrans Midstream Term Loan Facility (Details) - USD ($) | Mar. 03, 2020 | Dec. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Instrument | ||||||
Current portion of long-term debt | $ 0 | $ 6,000,000 | ||||
Letters of credit outstanding | [1] | $ 1,722,500,000 | 902,500,000 | |||
Term Loans | Equitrans Midstream Term Loans | ||||||
Debt Instrument | ||||||
Principal | $ 600,000,000 | |||||
Net proceeds from offering | $ 650,000,000 | 568,100,000 | ||||
Discount | 18,000,000 | |||||
Debt issuance costs | $ 13,900,000 | |||||
Write off of debt issuance cost | $ 24,400,000 | |||||
Current portion of long-term debt | 6,000,000 | |||||
Long term line of credit | 594,000,000 | |||||
Letters of credit outstanding | $ 0 | |||||
Weighted average annual interest rate (as a percent) | 6.20% | 6.80% | ||||
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. |
Debt - Equitrans Midstream Cred
Debt - Equitrans Midstream Credit Facility (Details) - USD ($) | Mar. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 31, 2018 | |
Debt Instrument | ||||||
Letters of credit outstanding | [1] | $ 1,722,500,000 | $ 902,500,000 | |||
Equitrans Midstream Credit Facility | Line of credit | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 100,000,000 | |||||
Write off of debt issuance cost | $ 500,000 | |||||
Long term line of credit | 0 | |||||
Maximum amount of short term loans outstanding | $ 44,000,000 | |||||
Average daily balance of short term loans outstanding | $ 12,000,000 | |||||
Weighted average annual interest rate (as a percent) | 4.20% | |||||
Payment commitment fees | $ 100,000 | $ 1,000,000 | ||||
Equitrans Midstream Credit Facility | Letter of credit | ||||||
Debt Instrument | ||||||
Letters of credit outstanding | $ 0 | |||||
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. |
Debt - Amended EQM Revolving Cr
Debt - Amended EQM Revolving Credit Facility and 2019 EQM Term Loan Agreement (Details) | Oct. 31, 2018USD ($) | Aug. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Sep. 30, 2019 | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Nov. 01, 2018USD ($) | |
Debt Instrument | |||||||||
Letters of credit outstanding | [1] | $ 1,722,500,000 | $ 902,500,000 | ||||||
EQM | EQM Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument | |||||||||
Borrowings outstanding | 1,430,000,000 | 610,000,000 | |||||||
Letters of credit outstanding | $ 235,000,000 | 1,000,000 | |||||||
Weighted average annual interest rate (as a percent) | 3.20% | 3.90% | |||||||
EQM | Line of credit | EQM Credit Facility | |||||||||
Debt Instrument | |||||||||
Maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | $ 3,000,000,000 | ||||||
Consolidated leverage ratio | 5.50 | 5.50 | |||||||
Consolidated net tangible asset ratio (percent) | 15.00% | 15.00% | |||||||
Consolidated net tangible asset ratio, negative trigger (percent) | 5.00% | 5.00% | |||||||
Additional available borrowings | $ 750,000,000 | ||||||||
Maximum amount of short term loans outstanding | $ 1,560,000,000 | $ 1,100,000,000 | |||||||
Average daily balance of short term loans outstanding | 1,027,000,000 | 942,000,000 | |||||||
Commitment fees | 1,200,000 | $ 1,000,000 | |||||||
EQM | Line of credit | EQM Credit Facility | Subsidiaries of EQM | |||||||||
Debt Instrument | |||||||||
Consolidated net tangible asset ratio (percent) | 15.00% | 15.00% | |||||||
Consolidated net tangible asset ratio, negative trigger (percent) | 5.00% | 5.00% | |||||||
EQM | Line of credit | EQM Credit Facility | Each Fiscal Quarter Ending Prior to the Revolver Amendment date | |||||||||
Debt Instrument | |||||||||
Consolidated leverage ratio | 5 | 5 | |||||||
EQM | Line of credit | EQM Credit Facility | Each Fiscal Quarter Ending on or after the Revolver Amendment Date and on or prior to Mar.31 2021 | |||||||||
Debt Instrument | |||||||||
Consolidated leverage ratio | 5.75 | 5.75 | |||||||
EQM | Line of credit | EQM Credit Facility | Each Fiscal Quarter Ending on or After Jun.30 2021 and on or Prior to Dec. 31 2021 | |||||||||
Debt Instrument | |||||||||
Consolidated leverage ratio | 5.50 | 5.50 | |||||||
EQM | Line of credit | EQM Credit Facility | Each Fiscal Quarter Ending on or After Mar.31 2022 and on or Prior to Dec. 31 2022 | |||||||||
Debt Instrument | |||||||||
Consolidated leverage ratio | 5.25 | 5.25 | |||||||
EQM | Line of credit | EQM Credit Facility | Each Fiscal Quarter Ending on and After Mar. 31 2023 | |||||||||
Debt Instrument | |||||||||
Consolidated leverage ratio | 5 | 5 | |||||||
EQM | Line of credit | EQM Credit Facility | Base Rate | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 0.125% | ||||||||
EQM | Line of credit | EQM Credit Facility | Base Rate | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 1.75% | ||||||||
EQM | Line of credit | EQM Credit Facility | Eurodollar | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 1.125% | ||||||||
EQM | Line of credit | EQM Credit Facility | Eurodollar | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 2.75% | ||||||||
EQM | Term Loans | 2019 EQM Term Loan Agreement | Base Rate | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 0.00% | ||||||||
EQM | Term Loans | 2019 EQM Term Loan Agreement | Base Rate | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 1.625% | ||||||||
EQM | Term Loans | 2019 EQM Term Loan Agreement | Eurodollar | Minimum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 1.00% | ||||||||
EQM | Term Loans | 2019 EQM Term Loan Agreement | Eurodollar | Maximum | |||||||||
Debt Instrument | |||||||||
Basis spread on variable rate (percentage) | 2.625% | ||||||||
EQM | Unsecured Debt | 2019 Term Loan Facility | |||||||||
Debt Instrument | |||||||||
Principal | $ 1,400,000,000 | ||||||||
Weighted average annual interest rate (as a percent) | 3.20% | ||||||||
Net proceeds from offering | 1,397,400,000 | ||||||||
Debt issuance costs | 2,600,000 | ||||||||
Long term line of credit | $ 1,400,000,000 | $ 1,400,000,000 | |||||||
EQM | Unsecured Debt | 2019 EQM Term Loan Agreement | |||||||||
Debt Instrument | |||||||||
Principal | $ 300,000,000 | ||||||||
EQM | Same-day swing line advances | EQM Credit Facility | |||||||||
Debt Instrument | |||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 | |||||||
EQM | Letter of credit | EQM Credit Facility | |||||||||
Debt Instrument | |||||||||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||||
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. |
Debt - Eureka Credit Facility (
Debt - Eureka Credit Facility (Details) - Eureka Midstream, LLC - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Oct. 31, 2018 | |
Debt Instrument | ||||
Borrowings outstanding | $ 293,000,000 | |||
Line of credit | Eureka Credit Facility | ||||
Debt Instrument | ||||
Maximum borrowing capacity | $ 400,000,000 | |||
Borrowings outstanding | $ 293,000,000 | $ 293,000,000 | ||
Maximum amount of short term loans outstanding | $ 293,000,000 | |||
Average daily balance of short term loans outstanding | $ 293,000,000 | |||
Weighted average annual interest rate (as a percent) | 3.90% | |||
Payment commitment fees | $ 200,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative instrument, at fair value | $ 55.7 | |
Gain on derivative instrument | 4.2 | |
EQM | Fair Value | Level 3 | EES | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Preferred interest | 120 | $ 126 |
EQM | Carrying Value | Level 3 | EES | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Preferred interest | 109 | 110 |
EQM Senior notes | EQM | Fair Value | Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt | 2,267 | 3,421 |
EQM Senior notes | EQM | Carrying Value | Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt | 3,463 | 3,462 |
Equitrans Midstream Term Loans | Term Loans | Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt | 595 | |
Equitrans Midstream Term Loans | Term Loans | Carrying Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt | $ 568 | $ 568.2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Class of Stock | |||
Net income | $ 189,560 | $ 199,566 | |
Net income attributable to noncontrolling interests | 119,828 | 143,267 | |
Net income attributable to Equitrans Midstream | $ 69,732 | $ 56,299 | |
Weighted average common stock outstanding - basic (in shares) | 248,591 | 254,776 | |
Dilutive securities (in shares) | 51 | ||
Weighted average common stock outstanding - diluted (in shares) | 248,591 | 254,827 | |
Earnings per share of common stock attributable to Equitrans Midstream - basic (in dollars per share) | [1] | $ 0.28 | $ 0.22 |
Earnings per share of common stock attributable to Equitrans Midstream - diluted (in dollars per share) | [1] | $ 0.28 | $ 0.22 |
Potentially dilutive securities (in shares) | 521,722 | ||
Series A Preferred Units | |||
Class of Stock | |||
Net income attributable to noncontrolling interests | $ 94,327 | $ 143,267 | |
Interest income | $ 25,501 | $ 0 | |
[1] | See Note 11 for disclosure regarding the Company's calculation of net income per share of common stock (basic and diluted). |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 9.20% | 14.00% |
Consolidated Variable Interes_3
Consolidated Variable Interest Entities - Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
ASSETS | |||
Cash and cash equivalents | $ 75,964 | $ 88,322 | |
Other current assets | 39,308 | 31,546 | |
Net property, plant and equipment | 7,750,762 | 7,723,967 | |
Investment in unconsolidated entity | 2,465,827 | 2,324,108 | |
Goodwill | 486,698 | 486,698 | |
Net intangible assets | 765,205 | 797,439 | |
Other assets | 307,356 | 243,688 | |
LIABILITIES | |||
Accounts payable | 109,151 | 128,114 | |
Capital contributions payable to the MVP Joint Venture | 87,647 | 45,150 | |
Accrued interest | 44,662 | 73,455 | |
Accrued liabilities | 51,677 | 83,238 | |
Revolving credit facility borrowings | [1] | 1,722,500 | 902,500 |
EQM long-term debt | 4,860,096 | 4,859,499 | |
Contract liability | [2] | 173,005 | 0 |
Regulatory and other long-term liabilities | 96,621 | 99,189 | |
Primary Beneficiary | |||
ASSETS | |||
Cash and cash equivalents | 14,267 | 15,760 | |
Accounts receivable, net | 249,061 | 254,109 | |
Other current assets | 39,279 | 25,004 | |
Net property, plant and equipment | 7,740,231 | 7,715,122 | |
Investment in unconsolidated entity | 2,465,827 | 2,324,108 | |
Goodwill | 486,698 | 486,698 | |
Net intangible assets | 765,205 | 797,439 | |
Other assets | 251,666 | 196,779 | |
LIABILITIES | |||
Accounts payable | 103,814 | 126,786 | |
Capital contributions payable to the MVP Joint Venture | 87,647 | 45,150 | |
Accrued interest | 44,662 | 73,366 | |
Accrued liabilities | 31,009 | 31,550 | |
Revolving credit facility borrowings | 1,722,500 | 902,500 | |
EQM long-term debt | 4,860,096 | 4,859,499 | |
Contract liability | 247,342 | 0 | |
Regulatory and other long-term liabilities | $ 78,099 | $ 78,397 | |
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. | ||
[2] | See Note 6 |
Consolidated Variable Interes_4
Consolidated Variable Interest Entities - Consolidated Operations and Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating revenues | $ 453,113 | $ 389,782 |
Operating expenses | 201,699 | 121,768 |
Other income (expenses), net | 3,871 | (16,083) |
Net income | 255,285 | 251,931 |
Net cash provided by operating activities | 285,136 | 160,973 |
Net cash used in investing activities | (845,857) | (350,357) |
Net cash provided by financing activities | $ 559,228 | $ 245,708 |
Consolidated Variable Interes_5
Consolidated Variable Interest Entities - Narratives (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity | |||
Revolving credit facility borrowings | [1] | $ 1,722,500 | $ 902,500 |
Contract liability | [2] | 173,005 | 0 |
Primary Beneficiary | |||
Variable Interest Entity | |||
Accounts receivable, net | 249,061 | 254,109 | |
Revolving credit facility borrowings | 1,722,500 | 902,500 | |
Contract liability | 247,342 | 0 | |
Primary Beneficiary | Eliminations | |||
Variable Interest Entity | |||
Contract liability | 74,300 | ||
Eureka Midstream, LLC | |||
Variable Interest Entity | |||
Borrowings outstanding | 293,000 | ||
Eureka Credit Facility | Line of Credit [Member] | Eureka Midstream, LLC | |||
Variable Interest Entity | |||
Borrowings outstanding | 293,000 | 293,000 | |
Affiliated Entity | Accounts Receivable | |||
Variable Interest Entity | |||
Accounts receivable, net | 183,400 | 175,200 | |
Revolving Credit Facility | EQM Credit Facility | EQM | |||
Variable Interest Entity | |||
Revolving credit facility borrowings | 235,000 | 1,000 | |
Borrowings outstanding | $ 1,430,000 | $ 610,000 | |
[1] | As of March 31, 2020 , the Company had aggregate borrowings outstanding of approximately $1,430 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively (as each is defined in Note 9 ). As of December 31, 2019 , the Company had aggregate borrowings outstanding of approximately $610 million and $293 million on the Amended EQM Credit Facility and the Eureka Credit Facility, respectively. The Company had no borrowings outstanding under the Equitrans Midstream Credit Facility as of December 31, 2019 . See Note 9 for further detail. | ||
[2] | See Note 6 |
Stock-based Compensation Plans
Stock-based Compensation Plans (Details) | 3 Months Ended |
Mar. 31, 2020shares | |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted (in shares) | 1,164,890 |
Performance period | 3 years |
Performance period weight (percent) | 40.00% |
Sub-performance period weight (percent) | 20.00% |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Payout percentage | 0.00% |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Payout percentage | 200.00% |
Performance Shares, Non-Cash | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Earned units (in shares) | 737,390 |
Performance Shares, Cash | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Earned units (in shares) | 427,500 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted (in shares) | 491,640 |
Performance period | 3 years |
Restricted Stock Units, Liability | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units granted (in shares) | 337,370 |
Performance period | 3 years |