Market Overview

Equitrans Midstream Launches as a Strong, Standalone Midstream Company with a Premier Asset Footprint

Share:

"ETRN" Trading on NYSE Begins

Equitrans Midstream Corporation (NYSE:ETRN), one of the largest natural
gas gatherers and transmission pipeline operators in the United States,
with a premier asset footprint in the Marcellus and Utica Shale region,
today announced that it has completed the previously announced spin-off
from EQT Corporation (NYSE:EQT). As a standalone publicly traded
company, Equitrans Midstream's common stock begins "regular-way" trading
today on the NYSE under the symbol "ETRN."

The separation of EQT's upstream and midstream businesses into two
standalone companies – Equitrans Midstream Corporation and EQT
Corporation – took effect at 11:59 p.m. (ET) on November 12, 2018
through a pro rata distribution of 80.1% of the outstanding common stock
of ETRN. EQT shareholders retained their EQT shares and received 0.80
shares of ETRN common stock for each share of EQT common stock
outstanding as of the close of business on November 1, 2018. EQT
retained 19.9% of the outstanding common stock of ETRN.

"Today, we launch Equitrans Midstream as a powerful independent company
with a very bright future," stated Thomas F. Karam, president and chief
executive officer. "Through its long history and unique asset position
across the Marcellus and Utica shale region, EQT built and transformed
its midstream business by capturing opportunities that achieved
tremendous growth. ETRN now emerges with strong fundamentals and – as we
work to deliver solutions for our customers and create additional value
for our shareholders – our goal is to achieve the scale and scope of a
premier, top-tier midstream company."

ETRN's strategy will focus on leveraging existing pipeline and storage
infrastructure systems by developing organic growth projects that will
expand its footprint across the Appalachian Basin with delivery to major
demand markets. These organic projects will primarily involve gathering
and transporting natural gas supplies from the most prolific natural gas
basin in North America; increasing access to local, regional, and
national markets; and providing water and other midstream services to
producers across the Basin. Additionally, ETRN's ongoing asset
optimization efforts, disciplined capital spending, and operating cost
control will create meaningful value for ETRN shareholders.

"During the past decade, EQT continued to build its midstream business
in parallel with upstream growth to create one of the strongest
midstream companies in the Appalachian Basin," said Diana Charletta,
chief operating officer of Equitrans Midstream. "We are laser-focused on
the execution of our inflight projects, including the Mountain Valley
Pipeline, which are expected to drive more than 50% growth in EBITDA
over the next three years. During this same period, the strength of our
customer relationships and associated contracts are expected to drive an
increase in ETRN's firm revenues, from 54% to approximately 60% of total
revenue."

ETRN owns the general partner interest and a 91.3% limited partner
interest in EQGP Holdings, LP (NYSE:EQGP), which owns the general
partner interest, all of the incentive distribution rights, and an
approximate 17.9% limited partner interest in EQM Midstream Partners, LP
(NYSE:EQM). ETRN holds an approximate 12.7% limited partner interest in
EQM, which owns, operates, acquires and develops natural gas gathering,
transmission and storage, and water services assets in the Appalachian
Basin.

Through its ownership interests in EQGP and EQM, ETRN's assets, located
in southwestern Pennsylvania, northern West Virginia, and southeastern
Ohio, are uniquely positioned across the Marcellus and Utica Shales. The
Equitrans transmission and storage system provides flexibility to
producers and marketers, as well as to demand customers through its
diverse supply, numerous storage pools, and interconnectivity to other
pipeline systems. Along with existing asset connectivity options,
additional projects that are backed by firm commitments are currently
underway. These projects include the Mountain Valley Pipeline, MVP
Southgate, and several pipeline extensions to in-Basin power plants –
all of which will increase the strategic nature of ETRN's pipeline
infrastructure system by accessing new and growing demand markets.

NON-GAAP DISCLOSURES

EQM Adjusted EBITDA

As used in this news release, EBITDA means net income attributable to
EQM plus net interest expense, depreciation, amortization of intangible
assets, payments on EQM's preferred interest in EQT Energy Supply, LLC
(Preferred Interest), non-cash long-term compensation expense and
transaction costs less equity income, AFUDC - equity and adjusted EBITDA
of assets prior to acquisition. Adjusted EBITDA is a non-GAAP
supplemental financial measure that management and external users of
ETRN's consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, use to assess:

  • EQM's operating performance as compared to other publicly traded
    partnerships in the midstream energy industry without regard to
    historical cost basis or financing methods;
  • the ability of EQM's assets to generate sufficient cash flow to make
    distributions to EQM unitholders, including EQGP and ETRN;
  • EQM'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.

ETRN believes that EQM adjusted EBITDA provides useful information to
investors in assessing ETRN's results of operations and financial
condition. EQM adjusted EBITDA should not be considered as an
alternative to EQM net income, operating income or any other measure of
financial performance presented in accordance with GAAP. EQM adjusted
EBITDA has important limitations as an analytical tool because it
excludes some, but not all, items that affect net income. Additionally,
because EQM adjusted EBITDA may be defined differently by other
companies in its industry, ETRN's definition of EQM adjusted EBITDA may
not be comparable to similarly titled measures of other companies,
thereby diminishing the utility of the measures.

ETRN is unable to provide a reconciliation of EQM's projected adjusted
EBITDA to EQM's projected 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 and
equity earnings, among other items, that are reconciling items between
adjusted EBITDA and net income. The timing of capital expenditures is
volatile as it depends on weather, regulatory approvals, contractor
availability, system performance and various other items. Therefore, the
reconciliation of projected EQM adjusted EBITDA to projected EQM net
income is not available without unreasonable effort.

About Equitrans Midstream Corporation

Equitrans Midstream Corporation (ETRN) has a premier asset footprint in
the Appalachian Basin and is one of the largest natural gas gatherers in
the United States. With a rich 135-year history in the energy industry,
ETRN was launched as a standalone company in 2018 and, through its
subsidiaries, has an operational focus on gas gathering systems,
transmission and storage systems, and water services assets that support
natural gas producers across the Basin. ETRN is helping to meet
America's growing need for clean-burning energy and strives to provide a
rewarding workplace and enrich the communities where its employees live
and work. ETRN owns the general partner interest and a 91.3% limited
partner interest in EQGP Holdings, LP (NYSE:EQGP) and a 12.7% limited
partner interest in EQM Midstream Partners, LP (NYSE:EQM). EQGP owns
the general partner interest, all of the incentive distribution rights,
and a 17.9% limited partner interest in EQM.

For more information on Equitrans Midstream Corporation, visit www.equitransmidstream.com

About EQM Midstream Partners

EQM Midstream Partners, LP (EQM) is a growth-oriented limited
partnership formed to own, operate, acquire, and develop midstream
assets in the Appalachian Basin. As the third largest gatherer of
natural gas in the United States, EQM provides midstream services to
producers, utilities, and other customers through its strategically
located natural gas transmission, storage, and gathering systems, and
water services to support energy development and production in the
Marcellus and Utica regions. EQM owns approximately 950 miles of
FERC-regulated interstate pipelines and approximately 2,130 miles of
high- and low-pressure gathering lines.

For more information on EQM Midstream Partners, LP visit www.eqm-midstreampartners.com

About EQGP Holdings

EQGP Holdings, LP (EQGP) 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 EQM Midstream Partners, LP.
Equitrans Midstream Corporation owns the general partner interest and a
91.3% limited partner interest in EQGP.

For more information on EQGP Holdings, LP, visit www.eqm-midstreampartners.com

Cautionary Statements

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 ETRN
and its subsidiaries, including the expected growth in earnings before
interest, taxes, depreciation, and amortization and firm revenues. These
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. ETRN has based these forward-looking
statements on current expectations and assumptions about future events.
While ETRN 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 ETRN's control. The
risks and uncertainties that may affect the operations, performance and
results of ETRN's business and forward-looking statements include, but
are not limited to, those risks discussed in ETRN's Registration
Statement on Form 10 and other filings with the Securities and Exchange
Commission.

Any forward-looking statement speaks only as of the date on which such
statement is made and ETRN 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.

View Comments and Join the Discussion!