PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced 2016 net loss attributable
to EQT of $453.0 million, or $2.71 loss per diluted share, compared to
net income attributable to EQT of $85.2 million, or $0.56 per diluted
share in the previous year. Net cash provided by operating activities
was $1,064.3 million in 2016, compared to $1,216.9 million the previous
year. Adjusted net loss during 2016 was $54.3 million, compared to
adjusted net income of $115.2 million in 2015, after considering several
items that affect direct year-over-year comparability. Adjusted loss per
share for the year was $0.33, compared to adjusted earnings per share
(EPS) of $0.75 in 2015; and adjusted operating cash flow attributable to
EQT was $816.0 million, compared to $825.4 million in 2015, resulting
from a lower average realized price, which offset the 26% sales volume
growth.
The Non-GAAP Disclosures section of this news release provides
reconciliations of non-GAAP financial measures to the most comparable
GAAP financial measures, as well as important disclosures regarding
certain projected non-GAAP financial measures and the items affecting
comparability of results. Effective December 31, 2016, EQT changed its
reporting segments to align its reporting structure with EQT Midstream
Partners (EQM) operations. As a result, EQT Midstream has been replaced
with EQT Gathering and EQT Transmission, which are equivalent to EQM's
reporting segments. Operations formerly reported in EQT Midstream that
are not included in EQM have been moved to the EQT Production segment.
Financial information for all periods presented has been recast to
reflect this segment change.
Fourth quarter 2016 net loss attributable to EQT was $192.0 million, or
$1.11 loss per share, compared to a net loss attributable to EQT of
$134.6 million, or $0.88 loss per share in the fourth quarter of 2015.
Net cash provided by operating activities was $296.6 million, compared
to $316.7 million. Adjusted net income was $43.8 million, compared to
adjusted net loss of $10.5 million; and adjusted EPS was $0.25, up from
adjusted loss per share of $0.07. Adjusted operating cash flow
attributable to EQT was $326.9 million, versus $239.1 million. Sales
volume was 28% higher, while average realized prices were 4% lower.
Highlights for 2016:
-
Production sales volume was 26% higher
-
Gathered volume was 21% higher
-
Acquired 145,500 net Marcellus acres, with 92,300 net Utica acres
-
Ohio Valley Connector placed in-service
-
Distributions to EQT from EQGP totaled $150 million
-
Cash and marketable securities at year-end were $1.4 billion
(excluding EQM)
RESULTS BY BUSINESS
EQT PRODUCTION
With its continued focus on the Marcellus shale, EQT Production achieved
record production sales volume of 759.0 Bcfe for 2016, representing a
26% increase over 2015.
EQT Production’s operating loss totaled $719.7 million for 2016,
compared to operating income of $132.0 million in 2015, primarily due to
a loss on derivatives not designated as hedges in 2016, compared to
gains on derivatives not designated as hedges in 2015. This $634.8
million year-over-year difference resulted from the impact of commodity
price changes on the Company’s mark-to-market derivative portfolio.
Increased sales volume was more than offset by a lower average realized
price and increased operating expenses. Operating revenue totaled
$1,387.1 million in 2016, compared to $2,131.7 million in 2015.
EQT Production’s adjusted operating loss, a non-GAAP financial measure,
totaled $164.0 million in 2016, compared to adjusted operating income of
$108.5 million in 2015. Production’s adjusted operating revenue, a
non-GAAP financial measure, which excludes the impact of non-cash
derivatives, was $1,872.3 million, or $10.2 million higher than the
previous year. The average realized price for 2016, including cash
settled derivatives, was $2.47 per Mcfe, 20% lower than the $3.09 per
Mcfe realized in 2015.
Consistent with the significant growth in sales volume and increased
drilling activity, EQT Production’s 2016 operating expense was $2,114.8
million, which was $115.1 million higher than in 2015. Specifically,
depreciation, depletion, and amortization expense (DD&A) was $93.7
million higher; gathering expense was $83.2 million higher; transmission
expense was $73.2 million higher; processing expense was $24.6 million
higher; and selling, general and administrative expense (SG&A) was $7.7
million higher. Exploration expense was $48.6 million lower primarily
due to decreased lease expirations and expenses related to exploratory
wells in 2015. Per unit lease operating expense (LOE), including
production taxes, was 21% lower, as volume increased more than expenses.
EQT Production’s operating loss totaled $251.1 million for the fourth
quarter of 2016, compared to an operating loss of $72.3 million in 2015.
Operating revenue totaled $318.3 million for the quarter, which was
$227.8 million lower than the same quarter in 2015. Increased sales
volume was more than offset by a loss on derivatives not designated as
hedges.
Production sales volume totaled 198.4 Bcfe in the fourth quarter 2016,
28% higher than the fourth quarter 2015. Adjusted operating income for
the quarter was $32.1 million, compared to adjusted operating income of
$1.8 million. EQT Production adjusted operating revenue for the quarter
was $578.5 million, which was $110.3 million higher than the same period
last year, primarily due to the increase in sales volume. Operating
expenses for the quarter were $577.4 million, which was 7% lower than
2015.
The Company drilled (spud) 135 gross wells during 2016, including 117
Marcellus wells, with an average expected length-of-pay of 7,300 feet;
13 Upper Devonian wells, with an average expected length-of-pay of 9,800
feet; and four Utica wells, with an average expected length-of-pay of
6,100 feet.
EQT GATHERING
EQT Gathering 2016 operating income was $289.0 million, $45.8 million
higher than 2015. Firm reservation fee revenue was $339.2 million in
2016, a $71.7 million increase over 2015. Operating revenue was $397.5
million, a $62.4 million increase over 2015, primarily as a result of
higher affiliate and third-party volumes gathered in 2016 compared to
2015, driven by production development in the Marcellus Shale.
EQT Gathering operating expenses were $108.5 million, a $16.6 million
increase over 2015. Specifically, SG&A was $9.2 million higher;
depreciation and amortization were $6.1 million higher; and operating
and maintenance expense (O&M) was $1.4 million higher.
EQT Gathering’s fourth quarter 2016 operating income was $70.8 million,
$2.8 million higher than the fourth quarter of 2015. Operating revenue
was $100.2 million, $9.5 million higher.
EQT TRANSMISSION
EQT Transmission 2016 operating income was $237.9 million, $30.1 million
higher than 2015. Firm reservation revenue was $277.8 million in 2016, a
$30.6 million increase over 2015. Operating revenue was $338.1 million,
a $40.3 million increase over 2015, as a result of affiliates
contracting for additional capacity under firm contracts, primarily on
the Ohio Valley Connector, which was placed in-service October 1, 2016.
Usage fees under firm contracts were $3.0 million higher, driven by an
increase in affiliate volumes associated with increased production
development in the Marcellus Shale.
Operating expenses were $100.2 million, $10.1 million higher than 2015.
Depreciation and amortization were $6.7 million higher; O&M was $1.8
million higher; and SG&A was $1.7 million higher.
EQT Transmission’s fourth quarter 2016 operating income was $63.8
million, $6.8 million higher than the fourth quarter of 2015. Total
operating revenue was $94.8 million, $14.8 million higher.
OTHER BUSINESS
2016 Capital Expenditures
EQT invested $2,074 million in production capital projects during 2016 –
including $1,284 million for property acquisitions and $783 million for
well development.
2016 Reserves Report
In a separate news release issued today, EQT reported total proved
reserves at December 31, 2016, of 13.5 Tcfe, a 35% increase over 2015;
and proved developed reserves totaled 6.8 Tcfe, a 9% increase over last
year.
Common Stock Offerings
In 2016, EQT completed two common stock offerings with proceeds totaling
$1.2 billion.
Marcellus Acreage Acquisitions
During the third quarter of 2016, the Company acquired approximately
62,500 net Marcellus acres in northern West Virginia for $373 million.
The acquisition also includes drilling rights on an estimated 53,000 net
acres in the Utica.
During the fourth quarter of 2016, the Company acquired approximately
42,600 net Marcellus acres in West Virginia for $508 million; and
approximately 17,000 net Marcellus acres located in southwestern
Pennsylvania for $170 million. The acquisitions also include drilling
rights on an estimated 39,300 net acres in the Utica.
Asset Sale to EQT Midstream Partners
Effective October 1, 2016, EQT sold the Allegheny Valley Connector
transmission and storage system, along with several Marcellus gathering
systems, to EQM for $275 million.
Pipeline Divestiture
In the fourth quarter of 2016, the Company sold a gathering system to a
third-party for $75.0 million.
Asset Impairments and Drilling Costs
During 2016, the Company recognized $75.4 million in total charges
(detailed below) related to impairment of long-lived assets and leases.
The Company recognized $69.9 million of these expenses in the fourth
quarter.
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Production impairment
|
|
|
|
|
|
|
|
|
|
Utica Ohio
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
4,252
|
|
Permian
|
|
|
-
|
|
|
94,313
|
|
|
-
|
|
|
94,313
|
|
Other leases
|
|
|
6,939
|
|
|
19,703
|
|
|
6,939
|
|
|
19,703
|
|
Processing equipment
|
|
|
-
|
|
|
4,201
|
|
|
-
|
|
|
4,201
|
|
Production SG&A
|
|
|
-
|
|
|
774
|
|
|
-
|
|
|
13,085
|
|
Production Exploratory
|
|
|
3,248
|
|
|
27,833
|
|
|
8,747
|
|
|
54,971
|
|
Production Total
|
|
|
10,187
|
|
|
146,824
|
|
|
15,686
|
|
|
190,525
|
|
|
|
|
|
|
|
|
|
|
|
Other Impairment*
|
|
|
59,748
|
|
|
-
|
|
|
59,748
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
69,935
|
|
$
|
146,824
|
|
$
|
75,434
|
|
$
|
190,525
|
|
*
|
Other impairment is related to gathering assets sold to EQM in
the fourth quarter of 2016. This impairment is included in
unallocated expenses in operating income.
|
|
|
|
EQT Midstream Partners, LP (NYSE: EQM) / EQT GP Holdings, LP (NYSE:
EQGP)
On January 19, 2017, EQM announced a cash distribution to its
unitholders of $0.85 per unit for the fourth quarter 2016. EQGP also
announced a cash distribution to its unitholders of $0.177 per unit for
the fourth quarter 2016.
The fourth quarter and year-end 2016 financial results for EQM and EQGP
were released today and provide operational results, as well as updates
on significant midstream projects under development by EQM. This news
release is available at www.eqtmidstreampartners.com.
Calculation of Net Income Attributable to Noncontrolling Interest
The results of EQGP and EQM are consolidated in EQT’s results. For the
year ended December 31, 2016, EQT reported net income of $321.9 million
attributable to the publicly held partnership interests in EQGP and EQM.
|
(thousands)
|
|
Year Ended
December 31, 2016
|
|
EQM net income
|
|
$
|
537,954
|
|
|
Less: Pre-acquisition income allocated to parent
|
|
|
21,861
|
|
|
Less: General Partner interest (including incentive distribution
rights)
|
|
|
102,741
|
|
|
Limited Partner interest in net income
|
|
$
|
413,352
|
|
|
|
|
|
|
EQM LP units
|
|
|
|
Publicly owned (72.8%)
|
|
$
|
300,815
|
|
|
EQGP owned (27.2%)
|
|
|
112,537
|
|
|
Limited Partner interest in net income
|
|
$
|
413,352
|
|
|
|
|
|
|
EQGP net income
|
|
|
|
EQM LP unit ownership
|
|
$
|
112,537
|
|
|
EQM GP unit ownership (including incentive distribution rights)
|
|
|
102,741
|
|
|
EQGP incremental expenses
|
|
|
(2,960
|
)
|
|
Limited Partner interest in net income
|
|
$
|
212,318
|
|
|
|
|
|
|
EQGP units
|
|
|
|
Publicly owned LP (9.9%)
|
|
$
|
21,105
|
|
|
EQT owned LP (90.1%)
|
|
|
191,213
|
|
|
Limited Partner interest in net income
|
|
$
|
212,318
|
|
|
|
|
|
|
Noncontrolling interest in EQT earnings
|
|
|
|
EQM publicly-owned LP units
|
|
$
|
300,815
|
|
|
EQGP publicly-owned LP units
|
|
|
21,105
|
|
|
Net income attributable to noncontrolling interest
|
|
$
|
321,920
|
|
|
|
|
|
|
|
Hedging
The Company's total natural gas production hedge position through 2019
is:
|
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
NYMEX Swaps
|
|
|
|
|
|
|
|
|
|
|
Total Volume (Bcf)
|
|
|
|
362
|
|
|
|
135
|
|
|
|
19
|
|
Average Price per Mcf (NYMEX)
|
|
|
$
|
3.35
|
|
|
$
|
3.14
|
|
|
$
|
3.12
|
|
|
|
|
|
|
|
|
|
|
|
|
Collars
|
|
|
|
|
|
|
|
|
|
|
Total Volume (Bcf)
|
|
|
|
22
|
|
|
|
−
|
|
|
|
−
|
|
Average Floor Price per Mcf (NYMEX)
|
|
|
$
|
3.03
|
|
|
$
|
−
|
|
|
$
|
−
|
|
Average Cap Price per Mcf (NYMEX)
|
|
|
$
|
3.94
|
|
|
$
|
−
|
|
|
$
|
−
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The Company also sold calendar year 2017 and 2018 calls for
approximately 32 Bcf and 16 Bcf, respectively, at strike prices of
$3.53 per Mcf and $3.48 per Mcf, respectively
-
For 2017 and 2018, the Company sold puts for approximately 3 Bcf at a
strike price of $2.63 per Mcf
-
The average price is based on a conversion rate of 1.05 MMBtu/Mcf
Operating (Loss) Income
The Company reports operating (loss) income by segment in this news
release. Interest, income taxes, and unallocated expense are controlled
on a consolidated, corporate-wide basis and are not allocated to the
segments.
The following table reconciles operating (loss) income by segment, as
reported in this news release, to the consolidated operating (loss)
income reported in the Company’s financial statements:
|
|
|
Three Months Ended
December 31,
|
|
Years Ended
December 31,
|
|
(thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
EQT Production
|
|
$
|
(251,053
|
)
|
|
$
|
(72,254
|
)
|
|
$
|
(719,731
|
)
|
|
$
|
132,008
|
|
|
EQT Gathering
|
|
|
70,753
|
|
|
|
67,931
|
|
|
|
289,027
|
|
|
|
243,257
|
|
|
EQT Transmission
|
|
|
63,837
|
|
|
|
56,994
|
|
|
|
237,922
|
|
|
|
207,779
|
|
|
Unallocated expense
|
|
|
(73,003
|
)
|
|
|
(7,380
|
)
|
|
|
(85,518
|
)
|
|
|
(19,905
|
)
|
|
Operating (loss) income
|
|
$
|
(189,466
|
)
|
|
$
|
45,291
|
|
|
$
|
(278,300
|
)
|
|
$
|
563,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated expenses consist primarily of an impairment on gathering
assets sold to EQM in 2016, incentive compensation expense, and
administrative costs.
Marcellus Horizontal Well Status (cumulative since inception)
|
|
|
As of
12/31/16
|
|
As of
9/30/16
|
|
As of
6/30/16
|
|
As of
3/31/16
|
|
As of
12/31/15
|
|
Wells drilled (spud)
|
|
1,046
|
*
|
|
949
|
*
|
|
896
|
|
869
|
|
854
|
|
Wells online
|
|
875
|
|
|
816
|
|
|
774
|
|
735
|
|
693
|
|
Wells complete, not online
|
|
21
|
|
|
32
|
|
|
34
|
|
45
|
|
57
|
|
Wells drilled, uncompleted
|
|
150
|
|
|
101
|
|
|
88
|
|
89
|
|
104
|
|
*Includes wells acquired in 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP DISCLOSURES
Adjusted Net Income (Loss) Attributable to EQT and Adjusted Earnings
(Loss) per Diluted Share
Adjusted net income (loss) attributable to EQT and adjusted earnings
(loss) per diluted share are non-GAAP supplemental financial measures
that are presented because they are important measures used by
management to evaluate period-to-period comparisons of earnings trends.
Adjusted net income (loss) attributable to EQT and adjusted earnings
(loss) per diluted share should not be considered as alternatives to net
(loss) income attributable to EQT or (loss) earnings per diluted share
presented in accordance with GAAP. Adjusted net income (loss)
attributable to EQT as presented excludes the revenue impact of changes
in the fair value of derivative instruments prior to settlement, gain on
sale of assets, asset impairments and drilling costs, Huron
restructuring charges, and pension settlement charges. Management
utilizes adjusted net income (loss) attributable to EQT to evaluate
earnings trends because the measure reflects only the impact of settled
derivative contracts and thus, the income from natural gas sales is not
impacted by the often volatile fluctuations in the fair value of
derivatives prior to settlement. The measure also excludes other items
that affect the comparability of results. Management believes that
adjusted net income (loss) attributable to EQT as presented provides
useful information for investors for evaluating period-over-period
earnings.
The table below reconciles adjusted net income (loss) attributable to
EQT and adjusted earnings (loss) per diluted share with net (loss)
income attributable to EQT and (loss) earnings per diluted share as
derived from the statements of consolidated operations to be included in
EQT’s report on Form 10-K for the year ended December 31, 2016.
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(thousands, except per share information)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net (loss) income attributable to EQT, as reported
|
|
$
|
(191,958
|
)
|
|
$
|
(134,579
|
)
|
|
$
|
(452,983
|
)
|
|
$
|
85,171
|
|
|
Add back / (deduct):
|
|
|
|
|
|
|
|
|
|
Asset impairments and drilling costs
|
|
|
69,935
|
|
|
|
146,824
|
|
|
|
75,434
|
|
|
|
190,525
|
|
|
Huron restructuring charges
|
|
|
-
|
|
|
|
-
|
|
|
|
4,360
|
|
|
|
-
|
|
|
Loss (gain) on derivatives not designated as hedges
|
|
|
216,649
|
|
|
|
(176,648
|
)
|
|
|
248,991
|
|
|
|
(385,762
|
)
|
|
Cash settlements received on derivatives not designated as hedges
|
|
|
56,909
|
|
|
|
101,219
|
|
|
|
279,425
|
|
|
|
172,093
|
|
|
Premiums (paid) received for derivatives that settled during the
period
|
|
|
(558
|
)
|
|
|
2,690
|
|
|
|
(2,132
|
)
|
|
|
(364
|
)
|
|
Gain on sale
|
|
|
(8,025
|
)
|
|
|
-
|
|
|
|
(8,025
|
)
|
|
|
-
|
|
|
Pension settlement charge
|
|
|
-
|
|
|
|
-
|
|
|
|
9,403
|
|
|
|
-
|
|
|
Tax impact of non-GAAP items*
|
|
|
(134,634
|
)
|
|
|
(29,782
|
)
|
|
|
(244,197
|
)
|
|
|
9,450
|
|
|
Subtotal
|
|
$
|
8,318
|
|
|
$
|
(90,276
|
)
|
|
$
|
(89,724
|
)
|
|
$
|
71,113
|
|
|
Tax expense (benefit) related to regulatory asset
|
|
|
35,438
|
|
|
|
275
|
|
|
|
35,438
|
|
|
|
(35,438
|
)
|
|
Valuation allowance
|
|
|
-
|
|
|
|
79,531
|
|
|
|
-
|
|
|
|
79,531
|
|
|
Adjusted net income (loss) attributable to EQT
|
|
$
|
43,756
|
|
|
$
|
(10,470
|
)
|
|
$
|
(54,286
|
)
|
|
$
|
115,206
|
|
|
Diluted weighted average common shares outstanding
|
|
|
173,688
|
|
|
|
152,633
|
|
|
|
166,978
|
|
|
|
152,939
|
|
|
Diluted EPS, as adjusted
|
|
$
|
0.25
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
0.75
|
|
|
*
|
A tax rate of 40.2% for the three and twelve months ended December
31, 2016 and 2015, was applied to the items under the caption “Add
back (deduct)”. This represents the incremental deferred tax
(expense) benefit that would have been incurred had these items
been excluded from net (loss) income attributable to EQT.
|
|
|
|
Operating Cash Flow and Adjusted Operating Cash Flow Attributable to
EQT
Operating cash flow and adjusted operating cash flow attributable to EQT
are non-GAAP supplemental financial measures that are presented as
indicators of an oil and gas exploration and production company’s
ability to internally fund exploration and development activities and to
service or incur additional debt. EQT includes this information because
management believes that changes in operating assets and liabilities
relate to the timing of cash receipts and disbursements and therefore
may not relate to the period in which the operating activities occurred.
Adjusted operating cash flow attributable to EQT excludes the
noncontrolling interest portion of adjusted EQT Midstream Partners
EBITDA (a non-GAAP supplemental financial measure reconciled below).
Management believes that removing the impact on operating cash flows of
the public unitholders of EQGP and EQM that is otherwise required to be
consolidated in EQT’s results provides useful information to an EQT
investor. Operating cash flow and adjusted operating cash flow
attributable to EQT should not be considered as alternatives to net cash
provided by operating activities presented in accordance with GAAP. The
tables below reconcile operating cash flow and adjusted operating cash
flow attributable to EQT with net cash provided by operating activities,
as derived from the statements of consolidated cash flows to be included
in EQT’s report on Form 10-K for the year ended December 31, 2016.
|
|
|
Three Months Ended
December 31,
|
|
Years Ended
December 31,
|
|
(thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net (loss) income
|
|
$
|
(108,785
|
)
|
|
$
|
(63,262
|
)
|
|
$
|
(131,063
|
)
|
|
$
|
321,886
|
|
|
Add back / (deduct):
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
244,972
|
|
|
|
219,425
|
|
|
|
927,920
|
|
|
|
819,216
|
|
|
Asset and lease impairments, non-cash
|
|
|
69,935
|
|
|
|
147,238
|
|
|
|
75,434
|
|
|
|
182,242
|
|
|
Deferred income tax (benefit) expense
|
|
|
(34,522
|
)
|
|
|
96,834
|
|
|
|
(180,261
|
)
|
|
|
17,876
|
|
|
Loss (gain) on derivatives not designated as hedges
|
|
|
216,649
|
|
|
|
(176,648
|
)
|
|
|
248,991
|
|
|
|
(385,762
|
)
|
|
Cash settlements received on derivatives not designated as hedges
|
|
|
56,909
|
|
|
|
101,219
|
|
|
|
279,425
|
|
|
|
172,093
|
|
|
Non-cash incentive compensation
|
|
|
10,054
|
|
|
|
17,007
|
|
|
|
44,605
|
|
|
|
58,629
|
|
|
Pension settlement charge
|
|
|
-
|
|
|
|
-
|
|
|
|
9,403
|
|
|
|
-
|
|
|
Other items, net
|
|
|
(13,827
|
)
|
|
|
(3,318
|
)
|
|
|
(35,862
|
)
|
|
|
(11,856
|
)
|
|
Operating cash flow:
|
|
$
|
441,385
|
|
|
$
|
338,495
|
|
|
$
|
1,238,592
|
|
|
$
|
1,174,324
|
|
|
|
|
|
|
|
|
|
|
|
|
(Deduct) / add back:
|
|
|
|
|
|
|
|
|
|
Changes in other assets and liabilities
|
|
|
(144,764
|
)
|
|
|
(21,773
|
)
|
|
|
(174,272
|
)
|
|
|
42,616
|
|
|
Net cash provided by operating activities
|
|
$
|
296,621
|
|
|
$
|
316,722
|
|
|
$
|
1,064,320
|
|
|
$
|
1,216,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Operating cash flow (a non-GAAP measure reconciled above)
|
|
$
|
441,385
|
|
|
$
|
338,495
|
|
|
$
|
1,238,592
|
|
|
$
|
1,174,324
|
|
|
(Deduct) / add back:
|
|
|
|
|
|
|
|
|
|
EQT Midstream Partners adjusted EBITDA(1)
|
|
|
(156,868
|
)
|
|
|
(128,611
|
)
|
|
|
(572,611
|
)
|
|
|
(449,015
|
)
|
|
Cash distribution payable to EQT (2)
|
|
|
42,430
|
|
|
|
29,245
|
|
|
|
150,062
|
|
|
|
100,101
|
|
|
Adjusted operating cash flow attributable to EQT
|
|
$
|
326,947
|
|
|
$
|
239,129
|
|
|
$
|
816,043
|
|
|
$
|
825,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
EQT Midstream Partners adjusted EBITDA is a non-GAAP supplemental
financial measure reconciled in this section.
|
|
(2)
|
Cash distribution payable to EQT for the three and twelve months
ended December 31, 2016 and 2015, represents the distribution
payable from EQGP to EQT.
|
|
|
|
EQT has not provided projected net cash provided by operating activities
or a reconciliation of projected adjusted operating cash flow
attributable to EQT to projected net cash provided by operating
activities, the most comparable financial measure calculated in
accordance with GAAP. EQT is unable to project net cash provided by
operating activities because this metric includes the impact of changes
in operating assets and liabilities related to the timing of cash
receipts and disbursements that may not relate to the period in which
the operating activities occurred. EQT is unable to project these timing
differences with any reasonable degree of accuracy without unreasonable
efforts such as predicting the timing of its and customers’ payments,
with accuracy to a specific day, three or more months in advance.
Furthermore, EQT does not provide guidance with respect to its average
realized price or income taxes, among other items, that are reconciling
items between net cash provided by operating activities and adjusted
operating cash flow attributable to EQT. Natural gas prices are volatile
and out of EQT’s control, and the timing of transactions and the income
tax effects of future transactions and other items are difficult to
accurately predict. Therefore, EQT is unable to provide projected net
cash provided by operating activities, or the related reconciliation of
projected adjusted operating cash flow attributable to EQT to projected
net cash provided by operating activities, without unreasonable effort.
EQT Production Adjusted Operating Revenues
The table below reconciles EQT Production adjusted operating revenues, a
non-GAAP supplemental financial measure, to EQT Corporation total
operating revenues as reported in the Statements of Consolidated
Operations, its most directly comparable financial measure calculated in
accordance with GAAP.
EQT Production adjusted operating revenues (also referred to as total
natural gas & liquids sales, including cash settled derivatives) is
presented because it is an important measure used by the Company’s
management to evaluate period-over-period comparisons of earnings
trends. EQT Production adjusted operating revenues as presented excludes
the revenue impact of changes in the fair value of derivative
instruments prior to settlement and the revenue impact of certain
pipeline and net marketing services. Management utilizes EQT Production
adjusted operating revenues to evaluate earnings trends because the
measure reflects only the impact of settled derivative contracts and
thus does not impact the revenue from natural gas sales with the often
volatile fluctuations in the fair value of derivatives prior to
settlement. EQT Production adjusted operating revenues also excludes
"Pipeline and net marketing services" because management considers these
revenues to be unrelated to the revenues for its natural gas and liquids
production. "Pipeline and net marketing services" primarily includes
revenues for gathering services provided to third-parties, as well as
both the cost of and recoveries on third-party pipeline capacity not
used for EQT Production sales volume. Management further believes that
EQT Production adjusted operating revenues, as presented, provide useful
information to investors for evaluating period-over-period earnings
trends.
|
Calculation of EQT Production adjusted operating revenues
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
$ in thousands (unless noted)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
EQT Production total operating revenues, as reported on segment page
|
|
$
|
318,302
|
|
|
$
|
546,125
|
|
|
$
|
1,387,054
|
|
|
$
|
2,131,664
|
|
|
Add back / (deduct):
|
|
|
|
|
|
|
|
|
|
Loss (gain) on derivatives not designated as hedges
|
|
|
216,649
|
|
|
|
(176,648
|
)
|
|
|
248,991
|
|
|
|
(385,762
|
)
|
|
Net cash settlements received on derivatives not designated as hedges
|
|
|
56,909
|
|
|
|
101,219
|
|
|
|
279,425
|
|
|
|
172,093
|
|
|
Premiums (paid) received for derivatives that settled during the
period
|
|
|
(558
|
)
|
|
|
2,690
|
|
|
|
(2,132
|
)
|
|
|
(364
|
)
|
|
Pipeline and net marketing services
|
|
|
(12,852
|
)
|
|
|
(5,223
|
)
|
|
|
(41,048
|
)
|
|
|
(55,542
|
)
|
|
EQT Production adjusted operating revenues, a non-GAAP financial
measure
|
|
$
|
578,450
|
|
|
$
|
468,163
|
|
|
$
|
1,872,290
|
|
|
$
|
1,862,089
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales volume (MMcfe)
|
|
|
198,399
|
|
|
|
154,537
|
|
|
|
758,967
|
|
|
|
603,082
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price to EQT Production ($/Mcfe)
|
|
$
|
2.92
|
|
|
$
|
3.03
|
|
|
$
|
2.47
|
|
|
$
|
3.09
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT Production total operating revenues, as reported on segment page
|
|
$
|
318,302
|
|
|
$
|
546,125
|
|
|
$
|
1,387,054
|
|
|
$
|
2,131,664
|
|
|
EQT Gathering total operating revenues, as reported on segment page
|
|
|
100,189
|
|
|
|
90,701
|
|
|
|
397,494
|
|
|
|
335,105
|
|
|
EQT Transmission total operating revenues, as reported on segment
page
|
|
|
94,825
|
|
|
|
80,012
|
|
|
|
338,120
|
|
|
|
297,831
|
|
|
Less: intersegment revenues, net
|
|
|
(134,294
|
)
|
|
|
(115,458
|
)
|
|
|
(514,320
|
)
|
|
|
(424,838
|
)
|
|
EQT Corporation total operating revenues, as reported in accordance
with GAAP
|
|
$
|
379,022
|
|
|
$
|
601,380
|
|
|
$
|
1,608,348
|
|
|
$
|
2,339,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT Production Adjusted Operating Income (Loss)
The table below reconciles EQT Production adjusted operating income
(loss), a non-GAAP supplemental financial measure, to EQT Corporation
operating (loss) income, as derived from the statements of consolidated
operations to be included in EQT’s report on Form 10-K for the year
ended December 31, 2016.
EQT Production adjusted operating income (loss) is presented because it
is an important measure used by EQT’s management to evaluate
period-over-period comparisons of earnings trends. EQT Production
adjusted operating income (loss) should not be considered as an
alternative to EQT Corporation operating (loss) income presented in
accordance with GAAP. EQT Production adjusted operating income (loss) as
presented excludes the revenue impact of changes in the fair value of
derivative instruments prior to settlement, impairment and drilling
costs, pension settlement charges, and Huron restructuring charges.
Management utilizes EQT Production adjusted operating income (loss) to
evaluate earnings trends because the measure reflects only the impact of
settled derivative contracts and thus the income from natural gas sales
is not impacted by the often volatile fluctuations in the fair value of
derivatives prior to settlement. The measure also excludes other items
that affect the comparability of results. Management believes that EQT
Production adjusted operating income (loss) as presented provides useful
information for investors for evaluating period-over-period earnings.
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
EQT Corporation operating (loss) income, as reported in accordance
with GAAP
|
|
$
|
(189,466
|
)
|
|
$
|
45,291
|
|
|
$
|
(278,300
|
)
|
|
$
|
563,139
|
|
|
Add back / (deduct):
|
|
|
|
|
|
|
|
|
|
Unallocated expense
|
|
|
73,003
|
|
|
|
7,380
|
|
|
|
85,518
|
|
|
|
19,905
|
|
|
EQT Gathering operating income, as reported on segment page
|
|
|
(70,753
|
)
|
|
|
(67,931
|
)
|
|
|
(289,027
|
)
|
|
|
(243,257
|
)
|
|
EQT Transmission operating income, as reported on segment page
|
|
|
(63,837
|
)
|
|
|
(56,994
|
)
|
|
|
(237,922
|
)
|
|
|
(207,779
|
)
|
|
EQT Production operating (loss) income, as reported on segment page
|
|
$
|
(251,053
|
)
|
|
$
|
(72,254
|
)
|
|
$
|
(719,731
|
)
|
|
$
|
132,008
|
|
|
Add back / (deduct):
|
|
|
|
|
|
|
|
|
|
Loss (gain) on derivatives not designated as hedges
|
|
|
216,649
|
|
|
|
(176,648
|
)
|
|
|
248,991
|
|
|
|
(385,762
|
)
|
|
Net cash settlements received on derivatives not designated as hedges
|
|
|
56,909
|
|
|
|
101,219
|
|
|
|
279,425
|
|
|
|
172,093
|
|
|
Premiums (paid) received for derivatives that settled during the
period
|
|
|
(558
|
)
|
|
|
2,690
|
|
|
|
(2,132
|
)
|
|
|
(364
|
)
|
|
Asset impairments and drilling costs
|
|
|
10,187
|
|
|
|
146,824
|
|
|
|
15,686
|
|
|
|
190,525
|
|
|
Pension settlement charge
|
|
|
-
|
|
|
|
-
|
|
|
|
9,403
|
|
|
|
-
|
|
|
Huron restructuring charges
|
|
|
-
|
|
|
|
-
|
|
|
|
4,360
|
|
|
|
-
|
|
|
EQT Production adjusted operating income (loss)
|
|
$
|
32,134
|
|
|
$
|
1,831
|
|
|
$
|
(163,998
|
)
|
|
$
|
108,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)
As used in this news release, EBITDA is defined as earnings before
interest, taxes, depreciation and amortization expense. EBITDA is not a
financial measure calculated in accordance with GAAP. EBITDA is a
non-GAAP supplemental financial measure that EQT’s management and
external users of EQT’s financial statements, such as industry analysts,
investors, lenders, and rating agencies, may use to assess: (i) EQT’s
performance versus prior periods; (ii) EQT’s operating performance as
compared to other companies in its industry; (iii) the ability of EQT’s
assets to generate sufficient cash flow to make distributions to its
investors; (iv) EQT’s ability to incur and service debt and fund capital
expenditures; and (v) the viability of acquisitions and other capital
expenditure projects and the returns on investment of various investment
opportunities.
EQT has not provided projected net (loss) income or reconciliations of
projected EBITDA to projected net (loss) income, the most comparable
financial measure calculated in accordance with GAAP. EQT does not
provide guidance with respect to its average realized price or income
taxes, among other items, that are reconciling items between EBITDA and
net (loss) income. Natural gas prices are volatile and out of EQT’s
control, and the timing of transactions and the income tax effects of
future transactions and other items are difficult to accurately predict.
Further, management believes a reliable forecasted effective tax rate is
not available because small fluctuations in estimated “ordinary” income
would result in significant changes in the estimated annual effective
tax rate for 2017. Consequently, EQT is not able to provide a projected
net (loss) income that would be useful to investors. Therefore,
projected net (loss) income and reconciliations of projected EBITDA to
projected net (loss) income are not available without unreasonable
effort.
EQT Midstream Partners Adjusted EBITDA
As used in this news release, EQT Midstream Partners adjusted EBITDA
means EQM’s net income plus EQM’s net interest expense, depreciation and
amortization expense, income tax expense (if applicable), preferred
interest payments received post-conversion, and non-cash long-term
compensation expense (if applicable) less EQM’s equity income,
AFUDC-equity, capital lease payments, and adjusted EBITDA for assets
prior to acquisition dates. EQT Midstream Partners adjusted EBITDA is a
non-GAAP supplemental financial measure that management and external
users of EQT’s consolidated financial statements, such as industry
analysts, investors, lenders and rating agencies, use to assess the
effects of the noncontrolling interests in relation to:
-
EQT's operating performance as compared to other companies in its
industry;
-
the ability of EQT's assets to generate sufficient cash flow to make
distributions to its investors;
-
EQT's ability to incur and service debt and fund capital expenditures;
and
-
the viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
EQT believes that EQT Midstream Partners adjusted EBITDA provides useful
information to investors in assessing EQT's financial condition and
results of operations. EQT Midstream Partners adjusted EBITDA should not
be considered as an alternative to EQM’s net income, operating income,
or any other measure of financial performance or liquidity presented in
accordance with GAAP. EQT Midstream Partners adjusted EBITDA has
important limitations as an analytical tool because it excludes some,
but not all, items that affect EQM's net income. Additionally, because
EQT Midstream Partners adjusted EBITDA may be defined differently by
other companies in EQT's or EQM's industries, the definition of EQT
Midstream Partners adjusted EBITDA may not be comparable to similarly
titled measures of other companies, thereby diminishing the utility of
the measure. The table below reconciles EQT Midstream Partners adjusted
EBITDA with EQM’s net income, as derived from the statements of
consolidated operations to be included in EQM’s report on Form 10-K for
the year ended December 31, 2016.
EQM is unable to provide a reconciliation of projected EQT Midstream
Partners adjusted EBITDA to projected EQM net income, the most
comparable financial measure calculated in accordance with GAAP, because
EQM does not provide guidance with respect to the intra-year timing of
its or Mountain Valley Pipeline, LLC’s capital spending, which impact
AFUDC-debt and equity as well as equity earnings, among other items,
that are reconciling items between EQT Midstream Partners adjusted
EBITDA and EQM net income. The timing of capital expenditures is
volatile as it depends on weather, regulatory approvals, contractor
availability, system performance and various other items. EQM provides a
range for the forecasts of EQM net income and EQT Midstream Partners
adjusted EBITDA to allow for the variability in the timing of capital
spending and the impact on the related reconciling items, many of which
interplay with each other. Therefore, the reconciliation of projected
EQT Midstream Partners adjusted EBITDA to projected EQM net income is
not available without unreasonable effort.
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net income
|
|
$
|
135,700
|
|
|
$
|
120,321
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
|
5,318
|
|
|
|
4,982
|
|
|
|
16,766
|
|
|
|
21,345
|
|
|
Depreciation and amortization expense
|
|
|
19,514
|
|
|
|
13,013
|
|
|
|
62,691
|
|
|
|
49,895
|
|
|
Income tax expense (benefit)
|
|
|
–
|
|
|
|
3,281
|
|
|
|
10,147
|
|
|
|
(16,741
|
)
|
|
Preferred interest payments received post conversion (a)
|
|
|
2,764
|
|
|
|
–
|
|
|
|
2,764
|
|
|
|
–
|
|
|
Non-cash long-term compensation expense
|
|
|
–
|
|
|
|
334
|
|
|
|
195
|
|
|
|
1,467
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Equity income
|
|
|
(3,759
|
)
|
|
|
(1,220
|
)
|
|
|
(9,898
|
)
|
|
|
(2,367
|
)
|
|
AFUDC - equity
|
|
|
(2,669
|
)
|
|
|
(2,439
|
)
|
|
|
(19,402
|
)
|
|
|
(6,327
|
)
|
|
Pre-acquisition capital lease payments for AVC (b)
|
|
|
–
|
|
|
|
(6,710
|
)
|
|
|
(17,186
|
)
|
|
|
(22,059
|
)
|
|
Adjusted EBITDA attributable to NWV Gathering (as defined below)
prior to acquisition (c)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(19,841
|
)
|
|
Adjusted EBITDA attributable to Rager Mountain Storage Company,
LLC (Rager) and certain gathering assets prior to acquisition (d)
|
|
|
–
|
|
|
|
(2,951
|
)
|
|
|
(11,420
|
)
|
|
|
(11,483
|
)
|
|
EQT Midstream Partners Adjusted EBITDA
|
|
$
|
156,868
|
|
|
$
|
128,611
|
|
|
$
|
572,611
|
|
|
$
|
449,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
In conjunction with the acquisition of Rager and certain gathering
assets, the operating agreement of EQT Energy Supply, LLC (EES) was
amended and the accounting for EQM's preferred interest in EES
converted from a cost method investment to a note receivable
effective October 1, 2016. There were no changes in the cash
payments; however, distributions from EES subsequent to this
amendment were recorded partly as a reduction in the note receivable
and partly as interest income, which is included in net interest
expense in EQM’s statements of consolidated operations.
Distributions received from EES prior to this amendment in 2016 were
included in other income in EQM’s statements of consolidated
operations. The calculation of adjusted EBITDA changed from the
prior period to reflect the cash payments from the preferred
interest in a consistent manner despite the change in accounting
treatment.
|
|
|
|
|
|
(b)
|
|
Reflects capital lease payments due under the lease. These lease
payments were generally made monthly on a one-month lag prior to
EQM’s acquisition of Allegheny Valley Connector, LLC (AVC).
|
|
|
|
|
|
(c)
|
|
Adjusted EBITDA attributable to the Northern West Virginia Gathering
System (NWV Gathering) prior to acquisition for the periods
presented was excluded from EQM’s adjusted EBITDA calculations as
these amounts were generated by NWV Gathering prior to acquisition
by EQM; therefore, the amounts could not have been distributed to
EQM’s unitholders. Adjusted EBITDA attributable to NWV Gathering
prior to acquisition for the year ended December 31, 2015, was
calculated as net income of $11.1 million plus depreciation and
amortization expense of $2.0 million plus income tax expense of $6.7
million.
|
|
|
|
|
|
(d)
|
|
Adjusted EBITDA attributable to AVC, excluding income tax expense
and AFUDC-equity, was previously included in EQM's results as a
result of the capital lease and was eliminated from EQT Midstream
Partners adjusted EBITDA by subtracting the capital lease payment;
therefore, there is no adjustment for AVC's adjusted EBITDA prior to
acquisition other than the capital lease payments, income tax
expense, and AFUDC-equity. Adjusted EBITDA attributable to Rager and
the gathering assets prior to EQT’s sale to EQM in October 2016 for
the periods presented was excluded from the EQT Midstream Partners
adjusted EBITDA calculations as these amounts were generated by
Rager and the gathering assets prior to acquisition by EQM;
therefore, the amounts could not have been distributed to EQM’s
unitholders. Adjusted EBITDA attributable to Rager and the gathering
assets prior to acquisition for the years ended December 31, 2016
and 2015 was calculated as net income of $1.3 million and $34.2
million, respectively, plus depreciation and amortization expense of
$2.1 million and $2.5 million, respectively, plus income tax expense
(benefit) of $10.1 million and $(23.4 million), respectively, less
interest income of $0.5 million and $1.1 million, respectively, less
AFUDC - equity of $1.6 million and $0.7 million, respectively.
Adjusted EBITDA attributable to Rager and the gathering assets prior
to acquisition for the three months ended December 31, 2015, was
calculated as net income of $0.1 million, plus depreciation and
amortization expense of $0.5 million, plus income tax expense of
$3.3 million, less interest income of $0.5 million, less AFUDC -
equity of $0.4 million.
|
|
|
|
|
Fourth Quarter and Year-End 2016 Webcast
Information
The Company's conference call with securities analysts begins at 10:30
a.m. ET today and will be broadcast live via the Company's web site at www.eqt.com,
and on the investor information page of the Company’s web site at ir.eqt.com,
with a replay available for seven days following the call.
EQT Midstream Partners, LP and EQT GP Holdings, LP, for which EQT
Corporation is the parent company, will also host a joint conference
call with security analysts today, beginning at 11:30 a.m. ET. The call
will be broadcast live via www.eqtmidstreampartners.com,
with a replay available for seven days following the call.
About EQT Corporation:
EQT Corporation is an integrated energy company with emphasis on
Appalachian area natural gas production, gathering, and transmission.
With more than 125 years of experience, EQT continues to be a leader in
the use of advanced horizontal drilling technology – designed to
minimize the potential impact of drilling-related activities and reduce
the overall environmental footprint. Through safe and responsible
operations, the Company is committed to meeting the country’s growing
demand for clean-burning energy, while continuing to provide a rewarding
workplace and enrich the communities where its employees live and work.
EQT also owns a 90% limited partner interest in EQT GP Holdings, LP. EQT
GP Holdings, LP owns the general partner interest, all of the incentive
distribution rights, and a portion of the limited partner interests in
EQT Midstream Partners, LP.
Visit EQT Corporation at www.EQT.com.
EQT Management speaks to investors from time-to-time and the analyst
presentation for these discussions, which is updated periodically, is
available via the Company’s investor relations website at http://ir.eqt.com.
About EQT Midstream Partners:
EQT Midstream Partners, LP is a growth-oriented limited partnership
formed by EQT Corporation to own, operate, acquire, and develop
midstream assets in the Appalachian Basin. The Partnership provides
midstream services to EQT Corporation and third-party companies through
its strategically located transmission, storage, and gathering systems
that service the Marcellus and Utica regions. The Partnership owns
approximately 950 miles of FERC-regulated interstate pipelines; and also
owns approximately 1,800 miles of high- and low-pressure gathering lines.
Visit EQT Midstream Partners, LP at www.eqtmidstreampartners.com.
About EQT GP Holdings:
EQT GP Holdings, LP is a limited partnership that owns the general
partner interest, all of the incentive distribution rights, and a
portion of the limited partner interests in EQT Midstream Partners, LP.
EQT Corporation owns a 90% limited partner interest in EQT GP Holdings,
LP.
Visit EQT GP Holdings, LP at www.eqtmidstreampartners.com.
Cautionary Statements
The United States Securities and Exchange Commission (SEC) permits oil
and gas companies, in their filings with the SEC, to disclose only
proved, probable and possible reserves that a company anticipates as of
a given date to be economically and legally producible and deliverable
by application of development projects to known accumulations. We use
certain terms, such as “EUR” (estimated ultimate recovery) and “3P”
(proved, probable and possible), that the SEC’s guidelines prohibit us
from including in filings with the SEC. These measures are by their
nature more speculative than estimates of reserves prepared in
accordance with SEC definitions and guidelines and accordingly are less
certain.
Total sales volume per day (or daily production) is an operational
estimate of the daily production or sales volume on a typical day
(excluding curtailments).
Disclosures in this news release contain certain forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended. Statements that do not relate strictly to historical or
current facts are forward-looking. Without limiting the generality of
the foregoing, forward-looking statements contained in this news release
specifically include the expectations of plans, strategies, objectives
and growth and anticipated financial and operational performance of the
Company and its subsidiaries, including guidance regarding the Company’s
strategy to develop its Marcellus, Upper Devonian, Utica, and other
reserves; drilling plans and programs (including the number, type, feet
of pay and location of wells to be drilled and number and type of
drilling rigs); projected natural gas prices, basis and average
differential; total resource potential, reserves, EUR, expected decline
curve and reserve replacement ratio; projected Company and third party
production sales volume and growth rates (including liquids sales volume
and growth rates); projected unit costs and well costs; projected
pipeline and net marketing services revenues; projected gathering and
transmission volume and growth rates; the Company’s access to, and
timing of, capacity on pipelines; infrastructure programs (including the
timing, cost and capacity of the transmission and gathering expansion
projects); the timing, cost, capacity and expected interconnects with
facilities and pipelines of the Mountain Valley Pipeline (MVP) project;
the ultimate terms, partners and structure of the MVP joint venture;
technology (including drilling and completion techniques); projected
EBITDA; acquisition transactions; monetization transactions, including
asset sales, joint ventures or other transactions involving the
Company’s assets; the projected cash flows resulting from the Company’s
limited partner interests in EQGP; internal rate of return (IRR) and
returns per well; projected capital contributions and expenditures;
potential future impairments of the Company’s assets; the amount and
timing of any repurchases under the Company’s share repurchase
authorization; liquidity and financing requirements, including funding
sources and availability; changes in the Company’s or EQM’s credit
ratings; projected net income attributable to noncontrolling interests,
adjusted operating cash flow attributable to EQT, revenues and
cash-on-hand; hedging strategy; the effects of government regulation and
litigation; projected dividend and distribution amounts and rates; tax
position and projected effective tax rate. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking statements
as a prediction of actual results. The Company has based these
forward-looking statements on current expectations and assumptions about
future events. While the Company considers these expectations and
assumptions to be reasonable, they are inherently subject to significant
business, economic, competitive, regulatory and other risks and
uncertainties, many of which are difficult to predict and beyond the
Company’s control. The risks and uncertainties that may affect the
operations, performance and results of the Company’s business and
forward-looking statements include, but are not limited to, those set
forth under Item 1A, “Risk Factors,” of the Company’s Form 10-K for the
year ended December 31, 2015 as filed with the SEC and in the Company's
Form 10-K for the year ended December 31, 2016 to be filed with the SEC,
as updated by any subsequent Form 10-Qs.
Any forward-looking statement speaks only as of the date on which such
statement is made and the Company does not intend to correct or update
any forward-looking statement, whether as a result of new information,
future events or otherwise.
Information in this news release regarding EQGP and its subsidiaries,
including EQM, is derived from publicly available information published
by the partnerships.
2017 GUIDANCE
Based on current NYMEX natural gas prices of $3.34, the Company
reiterates its current adjusted operating cash flow attributable to EQT
to be approximately $1,280 million for 2017, which includes
approximately $200 million from EQT’s interest in EQT GP Holdings, LP
(NYSE: EQGP). See the Non-GAAP Disclosures section for important
information regarding the non-GAAP financial measures included in this
news release, including reasons why EQT is unable to provide projections
of its 2017 net cash provided by operating activities and 2017 net
income, the most comparable financial measures to adjusted operating
cash flow attributable to EQT and total Production EBITDA, respectively,
calculated in accordance with GAAP.
|
PRODUCTION
|
|
|
|
|
|
|
|
Q1 2017
|
|
2017
|
|
Total production sales volume (Bcfe)
|
|
|
190 – 195
|
|
|
810 – 830
|
|
Liquids sales volume, excluding ethane (Mbbls)
|
|
|
2,520 – 2,540
|
|
|
10,100 – 10,500
|
|
Ethane sales volume (Mbbls)
|
|
|
845 – 865
|
|
|
3,100 – 3,300
|
|
Total liquids sales volume (Mbbls)
|
|
|
3,365 – 3,405
|
|
|
13,200 – 13,800
|
|
|
|
|
|
|
|
Marcellus / Utica Rigs
|
|
|
|
|
6 – 8
|
|
Top-hole rigs
|
|
|
|
|
5 – 7
|
|
|
|
|
|
|
|
Unit Costs ($ / Mcfe)
|
|
|
|
|
|
Gathering to EQT Gathering
|
|
|
|
$
|
0.46 – 0.48
|
|
Transmission to EQT Transmission
|
|
|
|
$
|
0.20 – 0.22
|
|
Third-party gathering and transmission*
|
|
|
|
$
|
0.40 – 0.42
|
|
Processing
|
|
|
|
$
|
0.15 – 0.17
|
|
LOE, excluding production taxes
|
|
|
|
$
|
0.13 – 0.15
|
|
Production taxes
|
|
|
|
$
|
0.07 – 0.09
|
|
SG&A
|
|
|
|
$
|
0.17 – 0.19
|
|
DD&A
|
|
|
|
$
|
1.06 – 1.08
|
|
|
|
|
|
|
|
Average differential ($ / Mcf)*
|
|
$
|
(0.15) – (0.05)
|
|
$
|
(0.60) – (0.50)
|
|
|
|
|
|
|
|
Pipeline and net marketing services ($MM)*
|
|
$
|
5 – 15
|
|
$
|
35 – 45
|
|
|
|
|
|
|
|
|
|
FINANCIAL
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest ($MM)
|
|
$
|
81 – 83
|
|
$
|
335 – 345
|
|
|
|
|
|
|
|
|
|
Total Production EBITDA**
|
|
|
|
|
$
|
1,160 - 1,180
|
|
|
|
|
|
|
|
|
|
*
|
EQT will utilize Rockies Express Pipeline capacity to transport a
portion of its produced gas in 2017. In 2016, EQT resold a portion
of and used a portion of the capacity for marketing activities. The
shift is expected to result in better differentials, higher
third-party gathering and transmission expenses, and lower net
marketing service revenues, all else equal
|
.
|
|
**
|
Excludes non-cash derivative losses.
|
|
|
|
|
|
|
EQT CORPORATION AND SUBSIDIARIES
Statements of
Consolidated Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Sales of natural gas, oil and NGLs
|
|
$
|
522,099
|
|
|
$
|
364,253
|
|
|
$
|
1,594,997
|
|
|
$
|
1,690,360
|
|
Pipeline and net marketing services
|
|
|
73,572
|
|
|
|
60,479
|
|
|
|
262,342
|
|
|
|
263,640
|
|
(Loss) gain on derivatives not designated as hedges
|
|
|
(216,649
|
)
|
|
|
176,648
|
|
|
|
(248,991
|
)
|
|
|
385,762
|
|
Total operating revenues
|
|
|
379,022
|
|
|
|
601,380
|
|
|
|
1,608,348
|
|
|
|
2,339,762
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Transportation and processing
|
|
|
114,534
|
|
|
|
68,219
|
|
|
|
365,817
|
|
|
|
275,348
|
|
Operation and maintenance
|
|
|
21,441
|
|
|
|
18,014
|
|
|
|
73,266
|
|
|
|
69,760
|
|
Production
|
|
|
48,734
|
|
|
|
41,635
|
|
|
|
174,826
|
|
|
|
177,935
|
|
Exploration
|
|
|
4,026
|
|
|
|
29,817
|
|
|
|
13,410
|
|
|
|
61,970
|
|
Selling, general and administrative
|
|
|
76,119
|
|
|
|
60,762
|
|
|
|
272,747
|
|
|
|
249,925
|
|
Depreciation, depletion and amortization
|
|
|
244,972
|
|
|
|
219,425
|
|
|
|
927,920
|
|
|
|
819,216
|
|
Impairment of long-lived assets
|
|
|
66,687
|
|
|
|
118,217
|
|
|
|
66,687
|
|
|
|
122,469
|
|
Total operating expenses
|
|
|
576,513
|
|
|
|
556,089
|
|
|
|
1,894,673
|
|
|
|
1,776,623
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale / exchange of assets
|
|
|
8,025
|
|
|
|
-
|
|
|
|
8,025
|
|
|
|
-
|
|
Operating (loss) income
|
|
|
(189,466
|
)
|
|
|
45,291
|
|
|
|
(278,300
|
)
|
|
|
563,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
8,494
|
|
|
|
3,664
|
|
|
|
31,693
|
|
|
|
9,953
|
|
Interest expense
|
|
|
39,451
|
|
|
|
35,935
|
|
|
|
147,920
|
|
|
|
146,531
|
|
(Loss) income before income taxes
|
|
|
(220,423
|
)
|
|
|
13,020
|
|
|
|
(394,527
|
)
|
|
|
426,561
|
|
Income tax (benefit) expense
|
|
|
(111,638
|
)
|
|
|
76,282
|
|
|
|
(263,464
|
)
|
|
|
104,675
|
|
Net (loss) income
|
|
|
(108,785
|
)
|
|
|
(63,262
|
)
|
|
|
(131,063
|
)
|
|
|
321,886
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
83,173
|
|
|
|
71,317
|
|
|
|
321,920
|
|
|
|
236,715
|
|
Net (loss) income attributable to EQT Corporation
|
|
$
|
(191,958
|
)
|
|
$
|
(134,579
|
)
|
|
$
|
(452,983
|
)
|
|
$
|
85,171
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock attributable to EQT Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
172,906
|
|
|
|
152,633
|
|
|
|
166,978
|
|
|
|
152,398
|
|
Net (loss) income
|
|
$
|
(1.11
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
(2.71
|
)
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
172,906
|
|
|
|
152,633
|
|
|
|
166,978
|
|
|
|
152,939
|
|
Net (loss) income
|
|
$
|
(1.11
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
(2.71
|
)
|
|
$
|
0.56
|
|
Dividends declared per common share
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT CORPORATION
PRICE RECONCILIATION
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
in thousands (unless noted)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
NATURAL GAS
|
|
|
|
|
|
|
|
|
|
Sales volume (MMcf)
|
|
|
175,290
|
|
|
|
141,352
|
|
|
|
683,495
|
|
|
|
547,094
|
|
|
NYMEX price ($/MMBtu) (a)
|
|
$
|
2.98
|
|
|
$
|
2.27
|
|
|
$
|
2.47
|
|
|
$
|
2.66
|
|
|
Btu uplift
|
|
$
|
0.29
|
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
0.25
|
|
|
Natural gas price ($/Mcf)
|
|
$
|
3.27
|
|
|
$
|
2.47
|
|
|
$
|
2.69
|
|
|
$
|
2.91
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis ($/Mcf) (b)
|
|
$
|
(0.88
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.63
|
)
|
|
Cash settled basis swaps (not designated as hedges) ($/Mcf)
|
|
|
0.21
|
|
|
|
0.19
|
|
|
|
0.09
|
|
|
|
0.03
|
|
|
Average differential, including cash settled basis swaps ($/Mcf)
|
|
$
|
(0.67
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Average adjusted price ($/Mcf)
|
|
$
|
2.60
|
|
|
$
|
2.06
|
|
|
$
|
1.97
|
|
|
$
|
2.31
|
|
|
Cash settled derivatives (cash flow hedges) ($/Mcf)
|
|
|
0.11
|
|
|
|
0.36
|
|
|
|
0.13
|
|
|
|
0.47
|
|
|
Cash settled derivatives (not designated as hedges) ($/Mcf)
|
|
|
0.11
|
|
|
|
0.55
|
|
|
|
0.31
|
|
|
|
0.28
|
|
|
Average natural gas price, including cash settled derivatives ($/Mcf)
|
|
$
|
2.82
|
|
|
$
|
2.97
|
|
|
$
|
2.41
|
|
|
$
|
3.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas sales, including cash settled derivatives
|
|
$
|
493,934
|
|
|
$
|
419,260
|
|
|
$
|
1,649,831
|
|
|
$
|
1,671,562
|
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS
|
|
|
|
|
|
|
|
|
|
NGLs (excluding ethane):
|
|
|
|
|
|
|
|
|
|
Sales volume (MMcfe)(c)
|
|
|
15,512
|
|
|
|
11,977
|
|
|
|
57,243
|
|
|
|
51,530
|
|
|
Sales volume (Mbbls)
|
|
|
2,585
|
|
|
|
1,996
|
|
|
|
9,540
|
|
|
|
8,588
|
|
|
Price ($ / Bbl)
|
|
$
|
27.55
|
|
|
$
|
21.23
|
|
|
$
|
19.43
|
|
|
$
|
18.84
|
|
|
NGL sales
|
|
$
|
71,217
|
|
|
$
|
42,372
|
|
|
$
|
185,405
|
|
|
$
|
161,775
|
|
|
Ethane:
|
|
|
|
|
|
|
|
|
|
Sales volume (MMcfe)(c)
|
|
|
6,546
|
|
|
|
-
|
|
|
|
13,856
|
|
|
|
-
|
|
|
Sales volume (Mbbls)
|
|
|
1,091
|
|
|
|
-
|
|
|
|
2,309
|
|
|
|
-
|
|
|
Price ($ / Bbl)
|
|
$
|
5.64
|
|
|
$
|
-
|
|
|
$
|
5.08
|
|
|
$
|
-
|
|
|
Ethane sales
|
|
$
|
6,152
|
|
|
$
|
-
|
|
|
$
|
11,742
|
|
|
$
|
-
|
|
|
Oil:
|
|
|
|
|
|
|
|
|
|
Sales volume (MMcfe)(c)
|
|
|
1,051
|
|
|
|
1,208
|
|
|
|
4,373
|
|
|
|
4,458
|
|
|
Sales volume (Mbbls)
|
|
|
175
|
|
|
|
201
|
|
|
|
729
|
|
|
|
743
|
|
|
Price ($ / Bbl)
|
|
$
|
40.79
|
|
|
$
|
32.45
|
|
|
$
|
34.73
|
|
|
$
|
38.70
|
|
|
Oil sales
|
|
$
|
7,148
|
|
|
$
|
6,531
|
|
|
$
|
25,312
|
|
|
$
|
28,752
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liquids sales volume (MMcfe)(c)
|
|
|
23,109
|
|
|
|
13,185
|
|
|
|
75,472
|
|
|
|
55,988
|
|
|
Total liquids sales volume (Mbbls)
|
|
|
3,851
|
|
|
|
2,197
|
|
|
|
12,578
|
|
|
|
9,331
|
|
|
Liquids sales
|
|
$
|
84,517
|
|
|
$
|
48,903
|
|
|
$
|
222,459
|
|
|
$
|
190,527
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PRODUCTION
|
|
|
|
|
|
|
|
|
|
Total natural gas & liquids sales, including cash settled
derivatives (d)
|
|
$
|
578,451
|
|
|
$
|
468,163
|
|
|
$
|
1,872,290
|
|
|
$
|
1,862,089
|
|
|
Total sales volume (MMcfe)
|
|
|
198,399
|
|
|
|
154,537
|
|
|
|
758,967
|
|
|
|
603,082
|
|
|
Average realized price ($/Mcfe)
|
|
$
|
2.92
|
|
|
$
|
3.03
|
|
|
$
|
2.47
|
|
|
$
|
3.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The Company's volume weighted NYMEX natural gas price (actual
average NYMEX natural gas price ($/MMBtu) was $2.98 and $2.27 for
the three months ended December 31, 2016 and 2015, respectively; and
$2.46 and $2.66 for the years ended December 31, 2016 and 2015,
respectively).
|
|
(b)
|
|
Basis represents the difference between the ultimate sales price for
natural gas and the NYMEX natural gas price.
|
|
(c)
|
|
NGLs, ethane and crude oil were converted to Mcfe at the rate of six
Mcfe per barrel for all periods.
|
|
(d)
|
|
Also referred to in this report as EQT Production adjusted operating
revenues, a non- GAAP supplemental financial measure.
|
|
|
|
|
|
EQT PRODUCTION
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volume detail (MMcfe):
|
|
|
|
|
|
|
|
|
|
Marcellus (a)
|
|
|
173,707
|
|
|
|
131,581
|
|
|
|
660,146
|
|
|
|
505,102
|
|
Other (b)
|
|
|
24,692
|
|
|
|
22,956
|
|
|
|
98,821
|
|
|
|
97,980
|
|
Total production sales volume (c)
|
|
|
198,399
|
|
|
|
154,537
|
|
|
|
758,967
|
|
|
|
603,082
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales volume (MMcfe/d)
|
|
|
2,157
|
|
|
|
1,680
|
|
|
|
2,074
|
|
|
|
1,652
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price ($/Mcfe)
|
|
$
|
2.92
|
|
|
$
|
3.03
|
|
|
$
|
2.47
|
|
|
$
|
3.09
|
|
|
|
|
|
|
|
|
|
|
|
Gathering to EQT Gathering ($/Mcfe)
|
|
$
|
0.46
|
|
|
$
|
0.54
|
|
|
$
|
0.48
|
|
|
$
|
0.51
|
|
Transmission to EQT Transmission ($/Mcfe)
|
|
$
|
0.22
|
|
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Third party gathering and transmission ($/Mcfe)
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.32
|
|
|
$
|
0.29
|
|
Processing ($/Mcfe)
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
|
$
|
0.16
|
|
|
$
|
0.17
|
|
Lease operating expenses (LOE), excluding production taxes ($/Mcfe)
|
|
$
|
0.14
|
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
|
$
|
0.19
|
|
Production taxes ($/Mcfe)
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.10
|
|
Production depletion ($/Mcfe)
|
|
$
|
1.06
|
|
|
$
|
1.24
|
|
|
$
|
1.06
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
DD&A (thousands):
|
|
|
|
|
|
|
|
|
|
Production depletion
|
|
$
|
209,475
|
|
|
$
|
191,910
|
|
|
$
|
803,883
|
|
|
$
|
713,651
|
|
Other DD&A
|
|
|
14,290
|
|
|
|
13,321
|
|
|
|
55,135
|
|
|
|
51,647
|
|
Total DD&A
|
|
$
|
223,765
|
|
|
$
|
205,231
|
|
|
$
|
859,018
|
|
|
$
|
765,298
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (thousands) (d)
|
|
$
|
979,160
|
|
|
$
|
401,162
|
|
|
$
|
2,073,907
|
|
|
$
|
1,893,750
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Sales of natural gas, oil and NGLs
|
|
$
|
522,099
|
|
|
$
|
364,254
|
|
|
$
|
1,594,997
|
|
|
$
|
1,690,360
|
|
Pipeline and net marketing services
|
|
|
12,852
|
|
|
|
5,223
|
|
|
|
41,048
|
|
|
|
55,542
|
|
(Loss) gain on derivatives not designated as hedges
|
|
|
(216,649
|
)
|
|
|
176,648
|
|
|
|
(248,991
|
)
|
|
|
385,762
|
|
Total operating revenues
|
|
|
318,302
|
|
|
|
546,125
|
|
|
|
1,387,054
|
|
|
|
2,131,664
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
|
106,076
|
|
|
|
89,918
|
|
|
|
413,758
|
|
|
|
330,562
|
|
Transmission
|
|
|
106,373
|
|
|
|
69,671
|
|
|
|
341,569
|
|
|
|
268,368
|
|
Processing
|
|
|
36,435
|
|
|
|
23,824
|
|
|
|
124,864
|
|
|
|
100,329
|
|
LOE, excluding production taxes
|
|
|
27,999
|
|
|
|
28,457
|
|
|
|
112,509
|
|
|
|
116,527
|
|
Production taxes
|
|
|
20,735
|
|
|
|
13,178
|
|
|
|
62,317
|
|
|
|
61,408
|
|
Exploration
|
|
|
4,026
|
|
|
|
29,842
|
|
|
|
13,410
|
|
|
|
61,970
|
|
SG&A
|
|
|
45,032
|
|
|
|
40,041
|
|
|
|
180,426
|
|
|
|
172,725
|
|
DD&A
|
|
|
223,765
|
|
|
|
205,231
|
|
|
|
859,018
|
|
|
|
765,298
|
|
Impairment of long-lived assets
|
|
|
6,939
|
|
|
|
118,217
|
|
|
|
6,939
|
|
|
|
122,469
|
|
Total operating expenses
|
|
|
577,380
|
|
|
|
618,379
|
|
|
|
2,114,810
|
|
|
|
1,999,656
|
|
Gain on sale/exchange of assets
|
|
|
8,025
|
|
|
|
-
|
|
|
|
8,025
|
|
|
|
-
|
|
Operating (loss) income
|
|
$
|
(251,053
|
)
|
|
$
|
(72,254
|
)
|
|
$
|
(719,731
|
)
|
|
$
|
132,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Includes Upper Devonian wells.
|
|
(b)
|
|
Includes 2,971 MMcfe and 2,442 MMcfe for the three months ended
December 31, 2016 and 2015, respectively; and 14,612 MMcfe and 4,173
MMcfe of Utica sales volume for the years ended December 31, 2016
and 2015, respectively.
|
|
(c)
|
|
NGLs and crude oil were converted to Mcfe at the rate of six Mcfe
per barrel for all periods.
|
|
(d)
|
|
Includes cash capital expenditures of $638.4 million and non-cash
capital expenditures of $83.9 million related to acquisitions during
the three months ended December 31, 2016. Includes cash capital
expenditures of $1,051.2 million and non-cash capital expenditures
of $87.6 million related to acquisitions during the year-ended
December 31, 2016.
|
|
|
|
|
|
EQT GATHERING
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
|
Firm reservation fee revenue
|
|
$
|
90,110
|
|
$
|
76,600
|
|
$
|
339,237
|
|
$
|
267,517
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
Usage fees under firm contracts (a)
|
|
|
6,893
|
|
|
7,739
|
|
|
38,408
|
|
|
33,021
|
|
Usage fees under interruptible contracts
|
|
|
3,186
|
|
|
6,362
|
|
|
19,849
|
|
|
34,567
|
|
Total volumetric based fee revenues
|
|
|
10,079
|
|
|
14,101
|
|
|
58,257
|
|
|
67,588
|
|
Total operating revenues
|
|
|
100,189
|
|
|
90,701
|
|
|
397,494
|
|
|
335,105
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
10,627
|
|
|
8,989
|
|
|
38,367
|
|
|
37,011
|
|
Selling, general and administrative
|
|
|
10,907
|
|
|
7,004
|
|
|
39,678
|
|
|
30,477
|
|
Depreciation and amortization
|
|
|
7,902
|
|
|
6,777
|
|
|
30,422
|
|
|
24,360
|
|
Total operating expenses
|
|
|
29,436
|
|
|
22,770
|
|
|
108,467
|
|
|
91,848
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
70,753
|
|
$
|
67,931
|
|
$
|
289,027
|
|
$
|
243,257
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
Gathered volume (BBtu per day)
|
|
|
|
|
|
|
|
|
|
Firm capacity reservation
|
|
|
1,697
|
|
|
1,297
|
|
|
1,553
|
|
|
1,140
|
|
Volumetric based services (b)
|
|
|
285
|
|
|
430
|
|
|
420
|
|
|
485
|
|
Total gathered volume
|
|
|
1,982
|
|
|
1,727
|
|
|
1,973
|
|
|
1,625
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
47,560
|
|
$
|
43,109
|
|
$
|
295,315
|
|
$
|
225,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Includes fees on volume gathered in excess of firm contracted
capacity.
|
|
(b)
|
|
Includes volume gathered under interruptible contracts and volume
gathered in excess of firm contracted capacity.
|
|
|
|
|
|
EQT TRANSMISSION
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
|
Firm reservation revenue
|
|
$
|
87,813
|
|
$
|
65,139
|
|
$
|
277,816
|
|
$
|
247,231
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
Usage fees under firm contracts (a)
|
|
|
3,405
|
|
|
12,429
|
|
|
45,679
|
|
|
42,646
|
|
Usage fees under interruptible contracts
|
|
|
3,607
|
|
|
2,444
|
|
|
14,625
|
|
|
7,954
|
|
Total volumetric based fee revenues
|
|
|
7,012
|
|
|
14,873
|
|
|
60,304
|
|
|
50,600
|
|
Total operating revenues
|
|
|
94,825
|
|
|
80,012
|
|
|
338,120
|
|
|
297,831
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
10,899
|
|
|
9,462
|
|
|
34,846
|
|
|
33,092
|
|
Selling, general and administrative
|
|
|
8,477
|
|
|
7,320
|
|
|
33,083
|
|
|
31,425
|
|
Depreciation and amortization
|
|
|
11,612
|
|
|
6,236
|
|
|
32,269
|
|
|
25,535
|
|
Total operating expenses
|
|
|
30,988
|
|
|
23,018
|
|
|
100,198
|
|
|
90,052
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
63,837
|
|
$
|
56,994
|
|
$
|
237,922
|
|
$
|
207,779
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
|
|
|
|
|
Firm capacity reservation
|
|
|
2,054
|
|
|
1,730
|
|
|
1,651
|
|
|
1,841
|
|
Volumetric based services (b)
|
|
|
57
|
|
|
387
|
|
|
430
|
|
|
281
|
|
Total transmission pipeline throughput
|
|
|
2,111
|
|
|
2,117
|
|
|
2,081
|
|
|
2,122
|
|
|
|
|
|
|
|
|
|
|
|
Average contracted firm transmission reservation commitments (BBtu
per day)
|
|
|
3,485
|
|
|
2,795
|
|
|
2,814
|
|
|
2,624
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
38,092
|
|
$
|
67,065
|
|
$
|
292,049
|
|
$
|
203,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Includes commodity charges and fees on volume transported in excess
of firm contracted capacity.
|
|
(b)
|
|
Includes volume transported under interruptible contracts and volume
transported in excess of firm contracted capacity.
|
