Equitrans Midstream Corporation (NYSE: ETRN) and EQM Midstream
Partners, LP (NYSE: EQM) today announced 2020 financial and capital
expenditure guidance.
EQM Financial Forecast:
$B
2020 Forecast
Net income attributable to EQM
$1.05 - $1.10
EQM adjusted EBITDA(1)
$1.36 - $1.41
The Non-GAAP Disclosures section of this news release includes
important disclosures regarding the non-GAAP financial measure EQM
adjusted EBITDA.
EQM Capital Expenditures & Capital
Contributions:
EQM forecasts 2020 growth capital expenditures (CAPEX) and
capital contributions to Mountain Valley Pipeline, LLC (MVP JV), to
be $1,200 - $1,300 million; and ongoing maintenance CAPEX to be
approximately $55 million.
$MM
2020 Forecast
MVP
$650 - $700
Gathering(2)
$430 - $460
Transmission(3)
$100 - $120
Water
$20
Total
$1,200 - $1,300
1. Forecast does not include (i) contributions from Mountain
Valley Pipeline (MVP), which has a targeted in-service of late 2020
and is backed by 20-year firm reservation commitments, or (ii)
contributions relating to the 20-year firm reservation commitments
backing the Hammerhead project and the Equitrans Expansion project,
which commitments commence with MVP in-service. Information
regarding these projects is available in ETRN’s and EQM’s investor
presentation which can be found at www.equitransmidstream.com and
www.eqm-midstreampartners.com.
2. Includes approximately $60 million from EQM’s 60% interest in
Eureka Midstream Holdings, LLC (Eureka Midstream).
3. Includes capital contributions of approximately $50 million
to MVP JV for the MVP Southgate project.
In conjunction with the third quarter 2019 EQM distribution and
ETRN dividend declarations, EQM announced that it expects to
maintain a quarterly distribution of $1.16 per common unit and ETRN
announced that it expects to maintain a quarterly dividend of $0.45
per share at least through the in-service date of MVP.
The 2020 business plan is expected to be funded through retained
cash flow and existing liquidity under EQM’s $3 billion unsecured
credit facility. As of September 30, 2019, the EQM credit facility
had approximately $2.7 billion of available capacity.
Contract negotiations with EQT remain active and while timing is
hard to predict, ETRN/EQM will only execute a deal that delivers
fair value to ETRN shareholders and EQM unitholders. ETRN and EQM
believe that a mutually beneficial and equitable agreement can be
achieved and expect that any agreement on gathering contracts will
not take effect prior to MVP in-service.
ETRN and EQM management speak to investors from time-to-time and
the presentation for these discussions, which is updated
periodically, is available via the companies' respective websites
at www.equitransmidstream.com and
www.eqm-midstreampartners.com.
NON-GAAP DISCLOSURES
EQM Adjusted EBITDA
As used in this news release, EQM adjusted EBITDA means net
income (loss) plus net interest expense, depreciation, amortization
of intangible assets, impairments of long-lived assets, payments on
EQM's preferred interest in EQT Energy Supply, LLC, non-cash
long-term compensation expense and transaction costs, less equity
income, AFUDC - equity, adjusted EBITDA attributable to
noncontrolling interest and adjusted EBITDA of assets prior to
acquisition. EQM adjusted EBITDA is a non-GAAP supplemental
financial measure that management and external users of ETRN's and
EQM’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;
- 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 and EQM believe that EQM adjusted EBITDA provides useful
information to investors in assessing ETRN's and EQM’s financial
condition and results of operations. EQM adjusted EBITDA should not
be considered as an alternative to 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 and operating income. Additionally, because
adjusted EBITDA may be defined differently by other companies in
ETRN's and EQM's industry, ETRN's and EQM’s definition of EQM
adjusted EBITDA may not be comparable to similarly titled measures
of other companies, thereby diminishing the utility of the
measure.
ETRN and EQM are unable to provide a reconciliation of EQM's
projected EQM adjusted EBITDA from 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 the MVP JV's capital spending, which
impact AFUDC – debt and – equity and equity earnings, among other
items, that are reconciling items between EQM 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. EQM provides a forecast
range for full-year 2020 net income attributable to EQM and EQM
adjusted EBITDA to allow for the variability in the timing of cash
receipts and disbursements, capital spending and the impact on the
related reconciling items, many of which interplay with one
another. Therefore, the reconciliation of projected EQM adjusted
EBITDA from projected 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, while also providing a rewarding workplace
and enriching the communities where its employees live and work.
ETRN owns the non-economic general partner interest and a majority
ownership of the limited partner interest in EQM.
Visit Equitrans Midstream Corporation at
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 one of the largest gatherers 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
also owns and/or operates approximately 1,900 miles of high- and
low-pressure gathering lines.
Visit EQM Midstream Partners, LP at
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 guidance regarding EQM’s projected adjusted
EBITDA and net income attributable to EQM; infrastructure programs
(including the timing of the in-service dates associated with such
projects); capital commitments; projected capital contributions and
capital and operating expenditures, including the amount and timing
of reimbursable capital expenditures, capital budget and sources of
funds for capital expenditures; liquidity and financing
requirements, including sources and availability; and dividend and
distribution amounts, timing, rates and growth, including the
effect thereon of completion of MVP; the final contractual terms,
if any, which might result from discussions with EQT or related
financial, operational or other effects of any new agreement or
amendments to existing agreements with EQT, and the timing of
resolution of such discussions; and expected cash flows and minimum
volume commitments. 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. ETRN and EQM have based these
forward-looking statements on current expectations and assumptions
about future events. While ETRN and EQM consider 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 and/or EQM’s control. The risks and uncertainties
that may affect the operations, performance and results of ETRN’s
and EQM’s business and forward-looking statements include, but are
not limited to, those set forth under (i) Item 1A, "Risk Factors"
in ETRN's Annual Report on Form 10-K for the year ended December
31, 2018 filed with the Securities and Exchange Commission (the
SEC), as may be updated by Part II, Item 1A, "Risk Factors," of
ETRN’s subsequent Quarterly Reports on Form 10-Q filed or to be
filed with the SEC, and (ii) Item 1A, "Risk Factors" in EQM's
Annual Report on Form 10-K for the year ended December 31, 2018
filed with the SEC, as may be updated by Part II, Item 1A, "Risk
Factors," of EQM’s subsequent Quarterly Reports on Form 10-Q filed
or to be filed with the SEC. Any forward-looking statement speaks
only as of the date on which such statement is made, and neither
ETRN nor EQM intends to correct or update any forward-looking
statement, unless required by securities laws, whether as a result
of new information, future events or otherwise.
SOURCE: Equitrans Midstream Corporation
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version on businesswire.com: https://www.businesswire.com/news/home/20191216005157/en/
Analyst inquiries: Nate Tetlow – Vice President,
Corporate Development and Investor Relations 412-553-5834
ntetlow@equitransmidstream.com
Media inquiries: Natalie Cox – Director, Communications
and Corporate Affairs 412-395-3941 ncox@equitransmidstream.com
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