Ongoing MaintenanceThe Partnership forecasts ongoing maintenance capital expenditures of approximately $17 - 18 million for 2014. Ongoing maintenance capital expenditures are cash expenditures made to maintain, over the long term, the Partnership’s operating capacity or operating income. Ongoing maintenance capital expenditures include approximately $5 million of reimbursable maintenance capital expenditures related to the bare steel replacement program. Funded Regulatory Compliance The Partnership forecasts funded regulatory compliance capital expenditures of approximately $12 million for 2014. Funded regulatory compliance capital expenditures relate to discrete expenditures necessary to comply with two specific regulatory compliance initiatives; system segmentation and isolation, and valve pit remediation. In order to fund these two initiatives, the Partnership retained $32 million from its initial public offering (IPO). Funded regulatory compliance capital expenditures do not impact the calculation of distributable cash flow and are expected to be substantially complete by the end of 2014. Liquidity : As of November 30, 2013 the Partnership had zero debt outstanding and $18 million of cash. The Partnership also has $350 million available under its revolving credit facility. As part of the Sunrise Pipeline acquisition in July 2013, the Partnership agreed to pay $110 million of consideration to EQT upon a third-party transportation agreement becoming effective. The third-party transportation agreement, which was related to EQT Corporation's sale of its natural gas utility, became effective on December 17, 2013. The consideration will be paid from cash-on-hand, plus borrowings from the credit facility. Year-end Earnings Information : The Partnership intends to release full-year 2013 earnings and host a live webcast for security analysts on February 13, 2014. The webcast will be available at www.eqtmidstreampartners.com and will begin at 11:30 a.m. ET. NON-GAAP DISCLOSURES Adjusted EBITDA and Distributable Cash Flow As used in this news release, adjusted EBITDA means net income plus net interest expense, depreciation and amortization expense, income tax expense (if applicable), non-cash long-term compensation expense and other non-cash adjustments (if applicable), less other income and lease payments (if applicable). As used in this news release, distributable cash flow means adjusted EBITDA less net cash interest, ongoing maintenance capital expenditures and reimbursable maintenance capital expenditures plus reimbursable maintenance capital expenditures expected to be reimbursed by EQT. Distributable cash flow should not be viewed as indicative of the actual amount of cash that the Partnership has available for distributions from operating surplus or that the Partnership plans to distribute. Adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of the Partnership’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess:
- the Partnership’s operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods;
- the ability of the Partnership’s assets to generate sufficient cash flow to make distributions to the Partnership’s unitholders;
- the Partnership’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.
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 two primary assets: the Equitrans Transmission and Storage System and the Equitrans Gathering System. The Partnership has a 700-mile FERC-regulated interstate pipeline system and more than 1,700 miles of FERC-regulated, low-pressure gathering lines. Visit EQT Midstream Partners, LP at www.eqtmidstreampartners.com. Cautionary Statements The Partnership is unable to provide a reconciliation of its projected adjusted EBITDA and projected distributable cash flow to projected net income or projected net cash provided by operating activities, the most comparable financial measures calculated in accordance with GAAP, because of uncertainties associated with projecting future net income and changes in assets and liabilities. The Partnership’s CAPEX forecast does not include capital expenditures for potential midstream infrastructure projects not committed at this date. Disclosures in this news release contain certain forward-looking statements. 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 Partnership and its subsidiaries, including guidance regarding the Partnership’s projected adjusted EBITDA and projected distributable cash flow; projected distributions per unit including quarterly increases; capital expenditures, including the amount of capital expenditures to be reimbursed by EQT; capital budget; project coverage ratio; the timing, amount of, and funding sources for, any payments to EQT for any third-party transportation agreements becoming effective related to the Sunrise Pipeline acquisition; accretion from acquisitions; organic transmission business growth; and infrastructure programs (including the timing, cost, and transmission capacity resulting from such projects). 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. The Partnership has based these forward-looking statements on current expectations and assumptions about future events. While the Partnership considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Partnership's control. The risks and uncertainties that may affect the operations, performance and results of the Partnership's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of the Partnership's Form 10-Q for the quarter ended September 30, 2013, as updated by any subsequent filed 10-Qs. Any forward-looking statement speaks only as of the date on which such statement is made and the Partnership 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 EQT Corporation and its subsidiaries, other than the Partnership, is derived from publicly available information published by EQT.