

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(Thousands)
Operating lease cost	$	2,852	$	4,149
Short-term lease cost	1,512		1,880
Variable lease cost	4		12
Total lease cost	$	4,368	$	6,041

Three Months Ended March 31, 2019
(Thousands)
Operating lease cost $ 1,297
Short-term lease cost 368
Variable lease cost 8
Total lease cost $ 1,673

Operating lease expense related to EQM's compressor lease contracts and facility lease contracts is reported in operating and maintenance expense and selling, general and administrative expense, respectively, on EQM's ~~statement~~statements of consolidated operations.

~~The current~~For the three and ~~noncurrent portions~~six months ended June 30, 2019, cash paid for operating lease liabilities was $2.5 million and $3.8 million, respectively, which was reported in cash flows provided by operating activities on EQM's statements of ~~the~~consolidated cash flows.

The operating lease right-of-use assets are reported in other ~~current~~ assets ~~and other assets, respectively,~~ and the current and noncurrent portions of the operating lease liabilities are reported in accrued liabilities and regulatory and other long-term liabilities, respectively. As of ~~March 31,~~June 30, 2019, the operating lease right-of-use assets were $52.8 million and operating lease liabilities ~~had balances of $34.8~~were $53.1 million, ~~and $34.9 million, respectively,~~ of which ~~$0.3~~$8.8 million ~~and $2.8 million, respectively, were~~was classified as current. As of ~~March 31,~~June 30, 2019, the weighted average remaining lease term was 118 years and the weighted average discount rate was 6.0%.

Schedule of Operating Lease Liability Maturities. The following table summarizes undiscounted cash flows owed by EQM to lessors pursuant to contractual agreements in effect as of ~~March 31,~~June 30, 2019 and related imputed interest. The majority of EQM's lease agreements have multiple renewal periods at EQM's option; however, because none of the renewal periods are reasonably assured to be exercised, the associated operating lease payments have not been included in the table below.



	June 30, 2019
	(Thousands)
2019	$	5,619
2020	10,937
2021	9,161
2022	7,694
2023	5,607
2024	3,966
Thereafter	24,728
Total	67,712
Less: imputed interest	14,597
Present value of operating lease liability	$	53,115

March 31, 2019
(Thousands)
2019 $ 3,702
2020 4,218
2021 4,070
2022 4,117
2023 3,841
2024 3,889
Thereafter 24,729
Total 48,566
Less: imputed interest 13,671
Present value of operating lease liability $ 34,895


4.5.	Equity

The following table summarizes changes in EQM's Series A Preferred Units, common units and Class B units, ~~both~~each representing limited partner interests in EQM, and general partner units during the year ended December 31, 2018 and from January 1, 2019 through ~~March 31,~~June 30, 2019.

Limited Partner Interests
Common Units Class B Units General Partner Units Total
Balance at January 1, 2018 80,581,758
—
1,443,015
82,024,773
Common units issued⁽¹⁾
10,821
—
—
10,821
Drop-Down Transaction consideration 5,889,282
—
—
5,889,282
Common units issued in the EQM-RMP Merger 33,975,777
—
—
33,975,777
Balance at December 31, 2018 120,457,638
—
1,443,015
121,900,653
Unit cancellation (8 ) —
—
(8 )
EQM IDR Transaction⁽²⁾
80,000,000
7,000,000
(1,443,015 ) 85,556,985
Balance at March 31, 2019 200,457,630
7,000,000
—
207,457,630

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	Limited Partner Interests
	Series A Preferred Units	Common Units		Class B Units	General Partner Units		Total
Balance at January 1, 2018	—	80,581,758		—	1,443,015		82,024,773
Common units issued⁽¹⁾	—	10,821		—	—		10,821
Drop-Down Transaction consideration	—	5,889,282		—	—		5,889,282
Common units issued in the EQM-RMP Merger	—	33,975,777		—	—		33,975,777
Balance at December 31, 2018	—	120,457,638		—	1,443,015		121,900,653
Unit cancellation	—	(8	)	—	—		(8	)
EQM IDR Transaction⁽²⁾	—	80,000,000		7,000,000	(1,443,015	)	85,556,985
Issuance of Series A Preferred Units	24,605,291	—		—	—		24,605,291
Balance at June 30, 2019	24,605,291	200,457,630		7,000,000	—		232,062,921


(1)	Units issued upon the resignation of a member of the Board of Directors of EQM's general partner.

(2)

In exchange for the cancellation of the EQM IDRs, EQM issued 87,000,000 EQM common units (the Exchange Consideration) to the Former EQM General Partner. At the effective time of the EQM IDR Merger, (i) the Exchange Consideration held by the Former EQM General Partner was canceled, (ii) 80,000,000 EQM common units and 7,000,000 Class B units were issued on a pro rata basis to certain affiliates of Equitrans Midstream, and (iii) 21,811,643 EQM common units held by EQGP were canceled and 21,811,643 EQM common units were issued pro rata to certain affiliates of Equitrans ~~midstream.~~Midstream.

~~On February 22,~~As of June 30, 2019, ~~the EQM IDRs were exchanged and canceled in the EQM IDR Transaction. After giving effect to the EQM IDR Transaction, including the issuance of the Class B units,~~ Equitrans Gathering Holdings, LLC (Equitrans Gathering Holdings), EQM GP Corporation (EQM GP Corp) and Equitrans Midstream Holdings, LLC (EMH), each a wholly-owned subsidiary of Equitrans Midstream, held 89,505,616, 89,536 and 27,650,303 EQM common units, ~~respectively, representing an aggregate 56.5% limited partner interest in EQM as of March 31, 2019.~~respectively. Additionally, Equitrans Gathering Holdings, EQM GP Corp and EMH held 6,153,907, 6,155 and 839,938 ~~EQM~~ Class B units, ~~respectively, representing an aggregate 3.4% limited partner interest in EQM as~~respectively. As of ~~March 31, 2019. Following completion of the EQM IDR Transaction and as of March 31,~~June 30, 2019, Equitrans Midstream owned, directly or indirectly, 117,245,455 EQM common units and 7,000,000 Class B units (collectively representing, after taking into account the Series A Preferred Units issued in the Private Placement on an as-converted basis, a ~~59.9%~~53.5% limited partner interest in EQM) and the entire non-economic general partner interest in EQM, while the public owned a ~~40.1%~~46.5% limited partner interest in EQM. Following the completion of the Private Placement, ~~(defined below),~~ certain investors owned an aggregate of ~~24.6 million~~24,605,291 Series A Preferred Units (defined below) and, taking into account such Series A Preferred Units issued in the Private Placement on an as-converted basis, as of March 31, 2019, Equitrans Midstream would have owned, directly or indirectly, a 53.5% limited partner interest in EQM, as well as the non-economic general partner interest in EQM.Units.

Class B Units

As discussed above and in Note 1, in February 2019, EQM issued 7,000,000 Class B units representing a new class of limited partner interests in EQM as partial consideration for the EQM IDR Transaction. The Class B units are substantially similar in all respects to EQM's common units, except that the Class B units are not entitled to receive distributions of available cash until the applicable Class B unit conversion date (or, if earlier, a change of control). The Class B units are divided into three tranches, with the first tranche of 2,500,000 Class B units becoming convertible at the holder’s option into EQM common units on April 1, 2021, the second tranche of 2,500,000 Class B units becoming convertible at the holder’s option into EQM common units on April 1, 2022, and the third tranche of 2,000,000 Class B units becoming convertible at the holder’s option on April 1, 2023 (each, a Class B unit conversion date). Additionally, the Class B units will become convertible at the holder’s option into EQM common units immediately before a change of control of EQM. After the applicable Class B unit conversion date (or, if earlier, a change of control), whether or not such Class B units have been converted into EQM common units, the Class B units will participate pro rata with the EQM common units in distributions of available cash.

The holders of Class B units vote together with the holders of EQM common units as a single class, except that Class B units owned by the general partner of EQM and its affiliates are excluded from voting if EQM common units owned by such parties are excluded from voting. Holders of Class B units are entitled to vote as a separate class on any matter that adversely affects the rights or preferences of the Class B units in relation to other classes of EQM partnership interests in any material respect or as required by law.

Series A Preferred Units

OnAs discussed in Note 1, in March ~~13,~~ 2019, EQM entered into ~~a Convertible~~the Preferred Unit Purchase Agreement ~~(inclusive of certain Joinder Agreements entered into on March 18, 2019, the Preferred Unit Purchase Agreement)~~ with certain investors to issue and sell in a private placement ~~(the Private Placement)~~ an aggregate of 24,605,291 Series A ~~Perpetual Convertible~~ Preferred Units ~~(Series A Preferred Units)~~ representing limited partner interests in EQM for a cash purchase price of $48.77 per Series A Preferred Unit, resulting in total gross proceeds of approximately $1.2 billion. The net proceeds from the Private Placement were used in part to fund the purchase price in the Bolt-on Acquisition and

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to pay certain fees and expenses related to the Bolt-on Acquisition, and the remainder ~~is expected to be~~was used for general partnership purposes. The Private Placement closed concurrently with the closing of the Bolt-on Acquisition on April 10, 2019.

The Series A Preferred Units rank senior to all common units and Class B units representing limited partner interests in EQM with respect to distribution rights and rights upon liquidation. The Series A Preferred Units will vote on an as-converted basis with the EQM common units and Class B units and will have certain other class voting rights with respect to any amendment to EQM's partnership agreement or its certificate of limited partnership that would be adverse (other than in a de minimis manner) to any of the rights, preferences or privileges of the Series A Preferred Units.

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The holders of the Series A Preferred Units are entitled to receive cumulative quarterly distributions at a rate of $1.0364 per Series A Preferred Unit for the first twenty distribution periods, and thereafter the quarterly distributions on the Series A Preferred Units will be an amount per Series A Preferred Unit for such quarter equal to (i) the Series A Preferred Unit purchase price of $48.77 per such unit, multiplied by (ii) a percentage equal to the sum of (A) the greater of (x) the 3-month LIBOR as of the second London banking day prior to the beginning of the applicable quarter and (y) 2.59%, and (B) 6.90%, multiplied by (iii) 25%. EQM will not be entitled to pay any distributions on any junior securities, including any EQM common units, prior to paying the quarterly distributions payable to the holders of Series A Preferred Units, including any previously accrued and unpaid distributions.

Each holder of the Series A Preferred Units may elect to convert all or any portion of the Series A Preferred Units owned by it into EQM common units initially on a one-for-one basis, subject to customary anti-dilution adjustments and an adjustment for any distributions that have accrued but have not been paid when due and partial period distributions, at any time (but not more often than once per fiscal quarter) after April 10, 2021 (or earlier liquidation, dissolution or winding up of EQM), provided that any conversion is for at least $30 million (calculated based on the closing price of the EQM common units on the trading day preceding notice of conversion) or such lesser amount if such conversion relates to all of a holder’s remaining Series A Preferred Units.

EQM may elect to convert all or any portion of the Series A Preferred Units into EQM common units at any time (but not more often than once per quarter) after April 10, 2021 if (i) the common units are listed for, or admitted to, trading on a national securities exchange, (ii) the closing price per common unit on the national securities exchange on which the common units are listed for, or admitted to, trading exceeds 140% of the Series A Preferred Unit purchase price of $48.77 per such unit for the 20 consecutive trading days immediately preceding notice of the conversion, (iii) the average daily trading volume of the common units on the national securities exchange on which the common units are listed for, or admitted to, trading exceeds 500,000 common units for the 20 consecutive trading days immediately preceding notice of the conversion, (iv) EQM has an effective registration statement on file with the SEC covering resales of the common units to be received by such holders upon any such conversion and (v) EQM has paid all accrued quarterly distributions in cash to the holders. In addition, upon certain events involving a change in control, the holders of Series A Preferred Units may elect, among other potential elections, to convert their preferred units into EQM common units at a certain conversion rate.


5.6.	Financial Information by Business Segment

EQM reports its operations in three segments that reflect its three lines of ~~business of~~business: Gathering, Transmission and Water. Gathering includes EQM's high-pressure gathering lines and FERC-regulated low-pressure gathering line; Transmission includes EQM's FERC-regulated interstate ~~pipeline~~pipelines and storage system; and Water consists of EQM's water pipelines, impoundment facilities, pumping stations, take point facilities and measurement facilities.

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	Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018		2019		2018
	(Thousands)				(Thousands)
Revenues from external customers (including related parties):
Revenues from customers (including related parties):
Gathering	$	261,881	$	237,390	$	285,666	$	241,189	$	547,547	$	478,579
Transmission	109,859		106,934		92,767		89,145		202,626		196,079
Water	18,042		26,702		27,734		44,363		45,776		71,065
Total operating revenues	$	389,782	$	371,026	$	406,167	$	374,697	$	795,949	$	745,723

Operating income:
Gathering	$	182,078	$	171,035	$	94,131	$	161,818	$	276,209	$	332,853
Transmission	84,750		79,451		63,244		60,642		147,994		140,093
Water	1,186		15,312		10,072		23,408		11,258		38,720
Total operating income	$	268,014	$	265,798	$	167,447	$	245,868	$	435,461	$	511,666

Reconciliation of operating income to net income:
Equity income ^(a)	31,063		8,811		$	36,782	$	10,938	$	67,845	$	19,749
Other income	2,210		904		1,959		944		4,169		1,848
Net interest expense	49,356		12,670		49,717		23,065		99,073		35,735
Net income	$	251,931	$	262,843	$	156,471	$	234,685	$	408,402	$	497,528



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019			2018
	(Thousands)
Environmental remediation reserve	$	26	$	—	$	(2,166	)	$	—
Other income	1,785		743		4,698			1,277
Net interest income	23,700		6,989		43,935			12,638
AFUDC - equity	55,298		16,307		102,514			29,489
Net income	$	80,809	$	24,039	$	148,981		$	43,404

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Three Months Ended
March 31,
2019 2018
(Thousands)
Environmental remediation reserve $ (2,192 ) $ —
Other income 2,913
534
Net interest income 20,235
5,649
AFUDC - equity 47,216
13,182
Net income $ 68,172
$ 19,365

9.10. Debt

$3 Billion Facility. On October 31, 2018, EQM amended and restated its credit facility to increase the borrowing capacity from $1 billion to $3 billion and extend the term to October 2023 (the $3 Billion Facility). The $3 Billion Facility is available for general partnership purposes, including to purchase assets, and to fund working capital requirements and capital expenditures,

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pay distributions and repurchase units. Subject to satisfaction of certain conditions, the $3 Billion Facility has an accordion feature that allows EQM to increase the available borrowings under the facility by up to an additional $750 million. The $3 Billion Facility has a sublimit of up to $250 million for same-day swing line advances and a sublimit of up to $400 million for letters of credit. In addition, EQM has the ability to request that one or more lenders make available term loans under the $3 Billion Facility, subject to the satisfaction of certain conditions. Such term loans would be secured by cash and qualifying investment grade securities. EQM's obligations under the revolving portion of the $3 Billion Facility are unsecured.

EQM's $3 Billion Facility contains negative covenants that, among other things, limit restricted payments, the incurrence of debt, dispositions, mergers and fundamental changes, and transactions with affiliates. In addition, the $3 ~~billion~~Billion Facility contains events of default such as insolvency, nonpayment of scheduled principal or interest obligations, change of control and cross-default related to the acceleration or default of certain other financial obligations. Under the $3 Billion Facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions).

As of ~~March 31,~~June 30, 2019, EQM had approximately $1.1 billion of borrowings outstanding and $1 million of letters of credit outstanding under the $3 Billion Facility. As of December 31, 2018, EQM had approximately $625 million of borrowings outstanding and $1 million of letters of credit outstanding under the $3 Billion Facility. During the three and six months ended ~~March 31,~~June 30, 2019, the maximum amount of EQM's outstanding borrowings under the $3 Billion Facility at any time was approximately $1.2 billion and the average daily balance was approximately $1,043 million and $993 million, respectively. EQM incurred interest at weighted average annual interest rates of approximately 3.8% and 3.9% for the three and six months ended June 30, 2019, respectively. During the three and six months ended June 30, 2018, the maximum amount of EQM's outstanding borrowings under the $3 Billion Facility at any time was ~~$1.1 billion~~approximately $338 million and $420 million, respectively, and the average daily balance was approximately ~~$942~~$122 million and ~~$301~~$211 million, respectively. EQM incurred interest at weighted average annual interest rates of approximately ~~3.9%~~3.4% and ~~3.0%~~3.2% for the three and six months ended ~~March 31, 2019 and~~June 30, 2018, respectively.

Eureka Credit Facility.Eureka Midstream, LLC (Eureka), a wholly owned subsidiary of Eureka Midstream, has a $400 million revolving credit facility, which is available for general business purposes, including financing maintenance and expansion capital expenditures related to the Eureka system and providing working capital for Eureka’s operations (the Eureka Credit Facility). Subject to satisfaction of certain conditions, the Eureka Credit Facility has an accordion feature that allows Eureka to increase the available borrowings under the facility by an additional $100 million to an aggregate $500 million of total commitments.

Under the terms of the Eureka Credit Facility, Eureka can obtain base rate loans or Eurodollar rate loans. Base rate loans are denominated in dollars and bear interest at an adjusted base rate, which was equal to the higher of (i) JPMorgan Chase Bank, N.A.'s prime rate, (ii) the one-month Adjusted Eurodollar Rate (as defined in the Eureka Credit Facility credit agreement) plus 1.0% or (iii) the Federal Funds effective rate plus 0.5% per annum; plus the Applicable Margin, as described below. Eurodollar rate loans bear interest at the Adjusted Eurodollar Rate per annum, which rate is to be determined by the administrative agent pursuant to a prescribed calculation based on the ICE Benchmark Administration LIBOR Rate plus the Applicable Margin. The Applicable Margin ranged from 0.75% to 2.0% in the case of base rate loans and from 1.75% to 3.0% in the case of Eurodollar loans, in each case, depending on the amount of the loan outstanding in relation to the borrowing base.

The Eureka Credit Facility contains negative covenants that, among other things, limit restricted payments, the incurrence of debt, dispositions, mergers and fundamental changes, securities issuances, and transactions with affiliates. In addition, the Eureka Credit Facility contains events of default such as insolvency, nonpayment of scheduled principal or interest obligations, loss of material contracts, change of control and cross-default related to the acceleration or default of certain other financial obligations. Under the Eureka Credit Facility, Eureka is required to maintain a consolidated leverage ratio of not more than 4.75 to 1.00 (or not more than 5.25 to 1.00 for certain measurement periods following the consummation of certain acquisitions). Additionally, as of the end of any fiscal quarter, Eureka will not permit the ratio of consolidated EBITDA (as defined in the Eureka Credit Facility) for the four fiscal quarters then ending to consolidated interest charges to be less than 2.50 to 1.00.

As of June 30, 2019, Eureka had approximately $293 million of borrowings outstanding under the Eureka Credit Facility. For the period from April 10, 2019 through June 30, 2019, the maximum amount of outstanding borrowings under the Eureka Credit Facility at any time was approximately $293 million, the average daily balance was approximately $277 million and Eureka incurred interest at a weighted average annual interest rate of approximately 4.5%.

EQM Term Loan Facility. On April 25, 2018, EQM entered into a $2.5 billion unsecured multi-draw 364-day term loan facility with a syndicate of lenders (the EQM Term Loan Facility). The EQM Term Loan Facility was used to fund the cash consideration for the Drop-Down Transaction, to repay borrowings under EQM's then-existing revolving credit facility and for other general partnership purposes. In connection with EQM's issuance of the 2018 Senior Notes (defined below), on June 25,

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2018, the balance outstanding under the EQM Term Loan Facility was repaid and the EQM Term Loan Facility was terminated. As a result of the termination, EQM expensed $3 million of deferred issuance costs. From April 25, 2018 through June 25, 2018, the maximum amount of EQM's outstanding borrowings under the EQM Term Loan Facility at any time was approximately $1,825 million and the average daily balance was approximately $1,231 million. EQM incurred interest at a weighted average annual interest rate of approximately 3.3% for the period from April 25, 2018 through June 25, 2018.

RMP $850 Million Facility. RM Operating LLC (formerly Rice Midstream OpCo LLC), a wholly-owned subsidiary of RMP, had an $850 million credit facility (the RMP $850 million Facility). In connection with the completion of the EQM-RMP Merger, on July 23, 2018, EQM repaid the approximately $260 million of borrowings outstanding under the RMP $850 Million Facility and the RMP $850 Million Facility was terminated. ~~The~~Prior to its termination, the RMP $850 Million Facility was available for general partnership purposes, including to purchase assets, and to fund working capital requirements and capital expenditures, pay distributions and repurchase units. The RMP $850 Million Facility was secured by mortgages and other security interests on substantially all of RMP's properties and was guaranteed by RMP and its restricted subsidiaries. During the three and six months ended ~~March 31,~~June 30, 2018, the maximum outstanding borrowings were approximately $325 million and $336 million, respectively, the average daily balance was approximately ~~$308~~$305 million and $306 million, respectively, and the weighted average annual interest rate for the period was approximately ~~3.6%.~~3.9% and 3.8%, respectively.

EQM 4.125% and 4.00% Senior Notes. In the fourth quarter of 2016, EQM issued $500 million aggregate principal amount of 4.125% senior notes due December 2026 (the 4.125% Senior Notes). EQM used the net proceeds from the offering to repay the

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then outstanding borrowings under a predecessor to the $3 ~~billion~~Billion Facility and for general partnership purposes. In the third quarter of 2014, EQM issued $500 million aggregate principal amount of 4.00% senior notes due August 2024 (the 4.00% Senior Notes). EQM used the net proceeds from the offering to repay the outstanding borrowings under a predecessor to the $3 ~~billion~~Billion Facility and for general partnership purposes.

Both the 4.125% Senior Notes and the 4.00% Senior Notes contain covenants that limit EQM's ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of EQM's assets.

2018 Senior Notes. During the second quarter of 2018, EQM issued 4.75% senior notes due July 2023 in the aggregate principal amount of $1.1 billion, 5.50% senior notes due July 2028 in the aggregate principal amount of $850 million and 6.50% senior notes due July 2048 in the aggregate principal amount of $550 million (collectively, the 2018 Senior Notes). EQM received net proceeds from the offering of approximately $2,465.8 million, inclusive of a discount of $11.8 million and estimated debt issuance costs of approximately $22.4 million. The net proceeds were used to repay the balances outstanding under the EQM Term Loan Facility and the RMP $850 Million Facility, and the remainder was used for general partnership purposes. The 2018 Senior Notes were issued pursuant to new supplemental indentures to EQM's existing indenture dated August 1, 2014. The 2018 Senior Notes contain covenants that limit EQM's ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of EQM's assets.

As of ~~March 31,~~June 30, 2019, EQM ~~was~~and Eureka were in compliance with all debt provisions and covenants.


~~10.~~11.	Fair Value Measurements

The carrying values of cash and cash equivalents, accounts receivable, amounts due to/from related parties and accounts payable approximate fair value due to the short maturity of the instruments; as such, their fair values are Level 1 fair value measurements. The carrying value of the credit facility borrowings approximates fair value as the interest rates are based on prevailing market rates; this is considered a Level 1 fair value measurement. As EQM's senior notes are not actively traded, their fair values are estimated using an income approach model that applies a discount rate based on prevailing market rates for debt with similar remaining time-to-maturity and credit risk; as such, their fair values are Level 2 fair value measurements. As of ~~March 31,~~June 30, 2019 and December 31, 2018, the estimated fair value of EQM's senior notes was approximately ~~$3,504~~$3,612 million and $3,425 million, respectively, and the carrying value of EQM's senior notes was approximately ~~$3,458~~$3,459 million and $3,457 million, respectively. The fair value of the Preferred Interest is a Level 3 fair value measurement and is estimated using an income approach model that applies a market-based discount rate. As of ~~March 31,~~June 30, 2019 and December 31, 2018, the estimated fair value of the Preferred Interest was approximately ~~$124~~$127 million and $122 million, respectively, and the carrying value of the Preferred Interest was approximately ~~$114~~$112 million and $115 million, respectively.


~~11.~~12.	Net Income per Limited Partner Unit and Cash Distributions

Net Income per Limited Partner Unit. Net income per limited partner unit is calculated utilizing the two-class method by dividing the limited partner interest in net income by the weighted average number of limited partner units outstanding during the period. The two-class method uses an earnings allocation method under which earnings per limited partner unit are

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calculated for each class of common unit and any participating security considering all ~~dividends~~distributions declared and participation rights in undistributed earnings as if all earnings had been distributed during the period. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units were exercised, settled or converted into EQM common units. EQM uses the ~~treasury stock~~if-converted method to compute potential common units from phantom units granted to independent and non-employee directors and the if-converted method to compute potential common units related to the conversion of Series A Preferred Units and Class B units. ~~For~~Under the if-converted method, dilutive convertible securities are assumed to be converted from the date of the issuance, and the resulting common units are included in the denominator of the diluted ~~earnings~~net income per unit ~~EQM uses~~calculation for the ~~more~~period being presented. Each series of potential common units is evaluated in sequence from the most dilutive to the least dilutive. Distributions declared in the period and undeclared distributions on the cumulative Series A Preferred Units that accumulated during the period are added back to the numerator for purposes of the if-converted ~~method or~~calculation.

As a result of the EQM IDR Transaction, EQM’s common unitholders are entitled to all distributions until the Class B units are converted to common units (other than distributions in respect of the Series A Preferred Units following the initial distribution period for such Series A Preferred Units commencing with the quarter ended June 30, 2019). Class B unitholders have no rights to distributions until they are convertible into common units. Accordingly, for all periods prior to the date such Class B units are convertible, the Class B units are not considered participating securities under the two-class method. In addition, the Series A Preferred Units are not considered a participating security as they only have distribution rights up to the specified per-unit quarterly distribution and have no rights to EQM’s undistributed earnings prior to conversion of the Series A Preferred Units into EQM common units, as discussed in Note 5.

For the three and six months ended June 30, 2019, limited partner interest in net income, which excludes the Series A Preferred Units interest in net income, was fully allocated to EQM’s common unitholders. For the three and six months ended June 30, 2018, net income attributable to EQM was allocated to the general partner and limited partners in accordance with their respective ownership percentages. Any common units issued during the relevant periods are included on a monthly weighted-average basis for the periods in which they were outstanding.

The phantom units granted to the independent and non-employee directors of EQM's general partner will be paid in common units on a director’s termination of service on the Board of Directors of EQM's general partner. The weighted average phantom unit awards included in the calculation of basic weighted average limited partner units outstanding were ~~21,908~~24,007 and ~~22,748~~21,041 for the three months ended ~~March 31,~~June 30, 2019 and 2018, ~~respectively. 7,000,000 Class B units were included in the calculation of diluted weighted average limited partner units outstanding~~respectively, and 22,896 and 20,506 for the ~~three~~six months ended ~~March 31,~~June 30, 2019 ~~based upon the application of the if-converted method.~~

As a result of the EQM IDR Transaction, EQM’s common unitholders are entitled to all distributions until the Class B units are converted to common units (other than distributions in respect of the Series A Preferred Units). Class B unitholders have no rights to distributions until they are converted into common units. Accordingly, for all periods prior to such conversions, the Class B units are not considered participating securities under the two-class method. For the three months ended March 31, 2019, net income attributable to EQM was fully allocated to EQM’s common unitholders. For the three months ended March 31,and 2018, ~~EQM's net income was allocated to the general partner and limited partners in accordance with their respective~~

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~~ownership percentages. Any common units issued during the period are included on a monthly weighted-average basis for the periods in which they were outstanding.~~respectively.

The following table presents EQM's calculation of net income per limited partner unit for common and Class B limited partner units.

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	Three Months Ended March 31,					Three Months Ended June 30,						Six Months Ended June 30,
	2019		2018⁽¹⁾			2019			2018⁽¹⁾			2019			2018⁽¹⁾
	(Thousands, except per unit data)					(Thousands, except per unit data)
Net income attributable to EQM	$	251,931	$	260,350		$	152,438		$	233,832		$	404,369		$	494,182
Less pre-acquisition net income allocated to parent	—		(83,132		)
Less general partner interest in net income – general partner units	—		(3,117		)
Less general partner interest in net income – IDRs	—		(44,164		)
Less: Series A Preferred Units interest in net income						(22,979		)	—			(22,979		)	—
Less: pre-acquisition net income allocated to parent						—			(72,620		)	—			(155,752		)
Less: general partner interest in net income – general partner units						—			(1,700		)	—			(4,791		)
Less: general partner interest in net income – IDRs						—			(68,121		)	—			(112,285		)
Limited partner interest in net income	$	251,931	$	129,937		$	129,459		$	91,391		$	381,390		$	221,354

Net income allocable to common units	$	251,931	$	129,937		$	129,459		$	91,391		$	381,390		$	221,354
Net income allocable to Class B units	$	—	$	—		$	—		$	—		$	—		$	—

Weighted average limited partner common units outstanding - basic	154,259		80,607			200,482			83,553			177,498			82,290
Weighted average limited partner common units outstanding - diluted⁽²⁾	161,259		80,607			207,482			83,553			195,645			82,290

Net income per limited partner common unit - basic	$	1.63	$	1.61		$	0.65		$	1.09		$	2.15		$	2.69
Net income per limited partner common unit - diluted	$	1.56	$	1.61		$	0.62		$	1.09		$	2.07		$	2.69

EQM'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 EQM's assets to generate sufficient cash flow to make distributions to EQM's unitholders;

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.

~~Transmission Expansion~~. During the first quarter of 2019, EQM invested approximately $16 million in transmission expansion projects. For the remainder of 2019, EQM expects to invest approximately $40 million in transmission expansion projects, primarily attributable to the Allegheny Valley Connector (AVC), the Equitrans, L.P. Expansion project, which is designed to provide north-to-south capacity on the mainline Equitrans, L.P. system, including for deliveries to the MVP, and power plant projects. The Equitrans, L.P. Expansion project has a targeted in-service date of the fourth quarter of 2019. In January 2019, EQM executed a precedent agreement with ESC Brooke County Power I, LLC to construct a natural gas pipeline for connection to a proposed 830-Megawatt power plant in Brooke County, West Virginia. The agreement includes a ten-year firm reservation commitment for 140 MMcf per day of capacity. EQM expects to invest an estimated $80 million to construct the approximately 16-mile pipeline, which has a targeted in-service date of mid-year 2022.

~~Water Expansion.~~ During the first quarter of 2019, EQM invested approximately $9 million in the expansion of its fresh water delivery infrastructure. For the remainder of 2019, EQM expects to invest approximately $91 million in the expansion of its fresh water delivery infrastructure in Pennsylvania and Ohio. During the first quarter of 2019, EQM expanded its water service relationship with EQT and entered into agreements with four other Marcellus and Utica producers. Based on the timing of customer well schedules, a majority of the fresh water services revenue is expected in the second half of 2019.

•

Transmission Expansion. During the six months ended June 30, 2019, EQM invested approximately $27 million in transmission expansion projects. For the remainder of 2019, EQM expects to invest approximately $25 million in transmission expansion projects, primarily attributable to the Allegheny Valley Connector (AVC), the Equitrans, L.P. Expansion project (EEP), which is designed to provide north-to-south capacity on the mainline Equitrans, L.P. system, including for deliveries to the MVP, and power plant projects. A portion of EEP is expected to commence operations with interruptible service in the third quarter of 2019. EEP will provide capacity of approximately 600 MMcf per day and offers access to several markets through interconnects with Texas Eastern Transmission, Dominion Transmission and Columbia Gas Transmission. EEP will also provide delivery into MVP and once MVP is placed in service, firm transportation agreements for 550 MMcf per day of capacity will commence under 20-year terms. EEP has a targeted full in-service date of mid-2020. In January 2019, EQM executed a precedent agreement with ESC Brooke County Power I, LLC to construct a natural gas pipeline for connection to a proposed 830-Megawatt power plant in Brooke County, West Virginia. The agreement includes a ten-year firm reservation commitment for 140 MMcf per day of capacity. EQM expects to invest an estimated $80 million to construct the approximately 16-mile pipeline, which has a targeted in-service date in 2023. As of June 30, 2019, EQM has invested approximately $1 million in the Brooke County project and expects to invest an additional $6 million for the remainder of 2019.

•

Water Expansion. During the six months ended June 30, 2019, EQM invested approximately $18 million in the expansion of its fresh water delivery infrastructure. In response to continued lower natural gas prices, several producer customers have modified their well development plans, which impacts the expected timing of EQM's fresh water delivery services. As a result, EQM now forecasts full-year 2019 water expansion capital expenditures of $50 million.

See further discussion of capital expenditures in the "Capital Requirements" section below.

See Note 2 to the consolidated financial statements for further discussion of the Bolt-on Acquisition.

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See "Critical Accounting Policies and Estimates" included in EQM's Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of ~~its~~EQM's accounting policies and significant assumptions related to the accounting for goodwill, and EQM's policies and processes with respect to impairment reviews for goodwill. EQM did not identify an impairment indicator related to goodwill during the ~~first~~second quarter of ~~2019.~~2019; however, as discussed in Note 3 to the consolidated financial statements, EQM did identify an impairment expense associated with its long-lived assets. Management will continue to monitor and evaluate the factors underlying the fair market value of acquired businesses and long-lived assets over the course of the year to determine if any interim assessments are necessary and will take any additional impairment charges required.

Commodity Prices. EQM’s business is dependent on continued natural gas production and the availability and development of reserves in its areas of operation. Low prices for natural gas and natural gas liquids could adversely affect development of additional reserves and production that is accessible by EQM’s pipeline and storage assets, which would also negatively affect EQM’s water services business. The Henry Hub natural gas price has ranged from $2.27 per MMbtu to $4.25 per MMbtu between January 1, 2019 and June 30, 2019, and the natural gas forward strip price has trended downwards during the first half of 2019. Further, market prices for natural gas in the Appalachian Basin continue to be lower than Henry Hub natural gas prices. Lower natural gas prices have caused producers to determine to reduce their rig count or otherwise take actions to slow production growth and/or reduce production, which in turn reduces the demand for, and usage of, EQM’s services, including water services, and a sustained period of depressed natural gas prices could cause producers to take further actions to reduce natural gas supply in the future. EQM’s customers, including EQT, have announced reductions in their capital spending and may announce further reductions in the future based on commodity prices, access to capital or other factors. Many of EQM’s customers have entered into long-term firm transmission and gathering contracts or contracts with MVCs on EQM's systems. However, approximately 48.3% of EQM’s gathering revenues and 11.8% of EQM’s transmission revenues for the second quarter of 2019 were from volumetric-based fee revenues. Additionally, EQM’s water service agreements are volumetric in nature. For more information see “Risks Inherent in Our Business - Any significant decrease in production of natural gas in our areas of operation could adversely affect our business and operating results and reduce our cash available to make distributions" included in Item 1A, "Risk Factors" of EQM’s Annual Report on Form 10-K for the year ended December 31, 2018.

EQT Change of Control. At EQT’s annual meeting held on July 10, 2019, EQT’s shareholders elected 12 individuals to the

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Board of Directors of EQT (EQT Board), seven of whom were nominated by a group led by Toby Z. Rice (the Rice Group), and five of whom were nominated by the EQT Board and recommended by the Rice Group. The EQT Board subsequently made certain executive changes, including appointing Toby Z. Rice as the President and Chief Executive Officer of EQT. On July 25, 2019, EQT announced that it is suspending its outlook for 2020 and beyond as it continues to develop its operating plan under the new management team. EQT is EQM’s largest customer, accounting for approximately 71.5% of EQM’s revenues for the six months ended June 30, 2019. For a discussion of EQM’s commercial relationship with EQT and related considerations, including risk factors, see EQM’s Annual Report on Form 10-K for the year ended December 31, 2018, as updated by this and any subsequent Quarterly Report on Form 10-Q.

EQM cannot predict the potential financial, operational or other effects on it of future actions taken by EQT’s new leadership team, including any changes to EQT’s drilling and production schedule or business strategy or actions affecting EQT’s credit rating or personnel.

Capital Resources and Liquidity

EQM's principal liquidity requirements are to finance its operations, fund capital expenditures, potential acquisitions and other strategic transactions and capital contributions to joint ventures, including the MVP Joint Venture and Eureka Midstream, pay cash distributions and satisfy any indebtedness obligations. EQM's ability to meet these liquidity requirements will depend on its ability to generate cash in the future as well as its ability to raise capital in banking, capital and other markets. EQM's available sources of liquidity include cash generated from operations, borrowing under EQM's credit facilities, cash on hand, debt ~~offerings~~transactions and issuances of additional EQM partnership interests. Pursuant to the tax matters agreement between Equitrans Midstream and EQT entered into in connection with the Separation, Equitrans Midstream is subject to certain restrictions related to certain corporate actions, including restrictions related to the issuance of Equitrans Midstream and EQM securities beyond certain thresholds. See “Our general partner may require us to forgo certain transactions in order to avoid the risk of Equitrans Midstream incurring material tax-related liabilities or indemnification obligations under Equitrans Midstream’s tax matters agreement with EQT.” under “Risks Inherent in an Investment in Us” included in “Item 1A. Risk Factors” of EQM's Annual Report on Form 10-K. EQM is not forecasting any public equity issuance for currently anticipated organic growth projects.

Operating Activities

Net cash flows provided by operating activities were ~~$161.0~~$510.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019 compared to ~~$284.0~~$622.9 million for the ~~three~~six months ended ~~March 31,~~June 30, 2018. The decrease was primarily driven by the timing of working capital payments, including higher interest payments.

Investing Activities

Net cash flows used in investing activities were ~~$350.4~~$1,675.3 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019 compared to ~~$286.5~~$1,756.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2018. The ~~increase~~decrease was ~~primarily~~ attributable to the Drop-Down Transaction in 2018 partly offset by the Bolt-on Acquisition, increased capital expenditures as further described in "Capital Requirements" and increased capital contributions to the MVP Joint Venture consistent with construction on the MVP and MVP Southgate projects.

Financing Activities

Net cash flows provided by financing activities were ~~$245.7~~$1,164.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019 compared to ~~$29.4~~$1,780.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2018. For the ~~three~~six months ended ~~March 31,~~June 30, 2019, ~~and 2018,~~ the primary source of financing cash flows were net proceeds from the issuance of the Series A Preferred Units and borrowings on ~~EQM's~~ credit ~~facility,~~facilities, net of repayments, while the primary use of financing cash flows were distributions paid to unitholders. For the six months ended June 30, 2018, the primary source of financing cash flows were proceeds from the issuance of the 2018 Notes, while the primary use of financing cash flows were repayments on EQM's credit facility, net of borrowings, distributions paid to unitholders and the purchase of the remaining 25% interest in Strike Force Midstream.

Capital Requirements

The gathering, transmission and storage and water services businesses are capital intensive, requiring significant investment to develop new facilities and to maintain and upgrade existing operations.

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	Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018⁽¹⁾		2019		2018⁽¹⁾		2019		2018⁽¹⁾
	(Thousands)				(Thousands)
Expansion capital expenditures ⁽²⁾	$	176,509	$	148,077	$	266,970	$	213,628	$	443,479	$	361,705
Maintenance capital expenditures	9,428		7,365		9,426		7,793		18,854		15,158
Total capital expenditures⁽⁴⁾⁽⁵⁾	$	185,937	$	155,442	$	276,396	$	221,421	$	462,333	$	376,863

~~WVDEP Rulemaking Proceedings – Section 401 Nationwide Permit.~~ On April 13, 2017, the West Virginia Department of Environmental Protection (WVDEP) issued a 401 Water Quality Certification for the U.S. Army Corps Nationwide Permits. In August 2018, the WVDEP initiated an administrative process to revise this certification and requested public comment to, among other things, specifically revise the 72-hour limit for stream crossings noted as problematic by the Fourth Circuit as well as other conditions. The WVDEP issued a new notice and comment period for further modifications of the 401 certification. This notice and comment period ended on March 4, 2019. The full administrative process requires notice and opportunity for public comment, response to public comment, and adherence to the state's administrative procedures legislation. The WVDEP is also required to obtain the EPA's agreement to the modified 401 certification. Assuming that the WVDEP's administrative process results in the clarification or elimination of any problematic conditions, and the EPA's agreement is secured, the MVP Joint Venture anticipates that it will once again secure from the U.S. Army Corps Districts within West Virginia verification that its activities, including stream crossings, may proceed under Nationwide Permit 12 as re-certified by the WVDEP. The MVP Joint Venture expects that reverification to occur within the first half of 2019. The notice and comment period ended on March 4, 2019. On April 24, 2019, the WVDEP submitted the modification to the EPA for approval and provided notice to the U.S. Army Corps. However, the MVP Joint Venture cannot guarantee that the EPA or the U.S. Army Corps Districts will act promptly or be deemed to have acted properly if challenged, in which case re-verification may be delayed past the first half of 2019.

~~Sierra Club, et al. v. U.S. Army Corps of Engineers et al., Case No. 18-1713, Fourth Circuit Court of Appeals.~~ In June 2018, the Sierra Club filed a second petition in the Fourth Circuit against the U.S. Army Corps, seeking review and a stay of the U.S. Army Corps Norfolk District's decision to verify the MVP Joint Venture's use of Nationwide Permit 12 for stream crossings in Virginia. The Fourth Circuit denied the Sierra Club's request for a stay on August 28, 2018. On October 5, 2018, the U.S. Army Corps' Norfolk District suspended its verification under Nationwide Permit 12 for stream crossings in Virginia pending the resolution of the West Virginia proceedings outlined above. On December 10, 2018, the U.S. Army Corps filed a motion to place the case in abeyance which the court granted on January 9, 2019. Until the U.S. Army Corps lifts its suspension, the MVP Joint Venture cannot perform any construction activities in any streams and wetlands in Virginia.

~~Sierra Club, et al. v. U.S. Forest Service, et al., consolidated under Case No. 17-2399, Fourth Circuit Court of Appeals.~~ In a different Fourth Circuit appeal filed in December 2017, the Sierra Club challenged a Bureau of Land Management (BLM) decision to grant a right-of-way to the MVP Joint Venture and a U.S. Forest Service (USFS) decision to amend its management plan to accommodate MVP, both of which affect the MVP's 3.6-mile segment in the Jefferson National Forest in Virginia. On July 27, 2018, agreeing in part with the Sierra Club, the Fourth Circuit vacated the BLM and USFS decisions, finding fault with the USFS' analysis of erosion and sedimentation effects and the BLM's analysis of the practicality of alternate routes. On August 3, 2018, citing the court's vacatur and remand, the FERC issued a stop work order for the entire pipeline pending the agency actions on remand. The FERC modified its stop work order on August 29, 2018 to allow work to continue on all but approximately 25 miles of the project. The MVP Joint Venture has resumed construction of those portions of the pipeline. On October 10, 2018, the Fourth Circuit granted a petition for rehearing filed by the MVP Joint Venture for the limited purpose of clarifying that the July 27, 2018, order did not vacate the portion of the BLM's Record of Decision authorizing a right-of-way and temporary use permit for MVP to cross the Weston and Gauley Bridge Turnpike Trail in Braxton County, West Virginia. On October 15, 2018, the MVP Joint Venture filed with the FERC a request to further modify the August 3, 2018 stop work order to allow the MVP Joint Venture to complete the bore and install the pipeline under the Weston and Gauley Bridge Turnpike Trail. On October 24, 2018, the FERC granted the MVP Joint Venture's request to further modify the stop work order and authorize construction. The MVP Joint Venture has resumed construction of those portions of the pipeline. However, work on the 3.6-mile segment in the Jefferson National Forest must await a revised authorization, which the MVP Joint Venture is working to obtain.

~~Challenges to FERC Certificate, Court of Appeals for the District of Columbia Circuit (DC Circuit).~~

•

WVDEP Rulemaking Proceedings – Section 401 Nationwide Permit. On April 13, 2017, the West Virginia Department of Environmental Protection (WVDEP) issued a 401 Water Quality Certification for the U.S. Army Corps Nationwide Permits. In August 2018, the WVDEP initiated an administrative process to revise this certification and requested public comment to, among other things, specifically revise the 72-hour limit for stream crossings noted as problematic by the Fourth Circuit as well as other conditions. The WVDEP issued a new notice and comment period for further modifications of the 401 certification. On April 24, 2019, the WVDEP submitted the modification to the United States Environmental Protection Agency (the EPA) for approval (since the WVDEP is also required to obtain the EPA's agreement to the modified 401 certification) and provided notice to the U.S. Army Corps. Assuming that the WVDEP's administrative process results in the clarification or elimination of any problematic conditions, and the EPA's agreement is secured, the MVP Joint Venture anticipates that it will once again secure from the U.S. Army Corps Districts within West Virginia verification that its activities, including stream crossings, may proceed under Nationwide Permit 12 as re-certified by the WVDEP. The MVP Joint Venture is targeting reverification to occur during the third quarter of 2019. However, the MVP Joint Venture cannot guarantee that WVDEP's action will not be challenged or that the EPA or the U.S. Army Corps Districts will act promptly or be deemed to have acted properly if challenged, in which case reverification may be delayed past the third quarter of 2019.

•

Sierra Club, et al. v. U.S. Army Corps of Engineers et al., Case No. 18-1713, Fourth Circuit Court of Appeals. In June 2018, the Sierra Club filed a second petition in the Fourth Circuit against the U.S. Army Corps, seeking review and a stay of the U.S. Army Corps Norfolk District's decision to verify the MVP Joint Venture's use of Nationwide Permit 12 for stream crossings in Virginia. The Fourth Circuit denied the Sierra Club's request for a stay on August 28, 2018. On October 5, 2018, the U.S. Army Corps' Norfolk District suspended its verification under Nationwide Permit 12 for stream crossings in Virginia pending the resolution of the West Virginia proceedings outlined above. On December 10, 2018, the U.S. Army Corps filed a motion to place the case in abeyance which the court granted on January 9, 2019. Until the U.S. Army Corps lifts its suspension, the MVP Joint Venture cannot perform any construction activities in any streams and wetlands in Virginia.

•

Sierra Club, et al. v. U.S. Forest Service, et al., consolidated under Case No. 17-2399, Fourth Circuit Court of Appeals. In a different Fourth Circuit appeal filed in December 2017, the Sierra Club challenged a Bureau of Land Management (BLM) decision to grant a right-of-way to the MVP Joint Venture and a U.S. Forest Service (USFS) decision to amend its management plan to accommodate MVP, both of which affect the MVP's 3.6-mile segment in the Jefferson National Forest in Virginia. On July 27, 2018, agreeing in part with the Sierra Club, the Fourth Circuit vacated the BLM and USFS decisions, finding fault with the USFS' analysis of erosion and sedimentation effects and the BLM's analysis of the practicality of alternate routes. On August 3, 2018, citing the court's vacatur and remand, the FERC issued a stop work order for the entire pipeline pending the agency actions on remand. The FERC modified its stop work order on August 29, 2018 to allow work to continue on all but approximately 25 miles of the project. The MVP Joint Venture has resumed construction of those portions of the pipeline. On October 10, 2018, the Fourth Circuit granted a petition for rehearing filed by the MVP Joint Venture for the limited purpose of clarifying that the July 27, 2018, order did not vacate the portion of the BLM's Record of Decision authorizing a right-of-way and temporary use permit for MVP to cross the Weston and Gauley Bridge Turnpike Trail in Braxton County, West Virginia. On October 15, 2018, the MVP Joint Venture filed with the FERC a request to further modify the August 3, 2018 stop work order to allow the MVP Joint Venture to complete the bore and install the pipeline under the Weston and Gauley Bridge Turnpike Trail. On October 24, 2018, the FERC granted the MVP Joint Venture's request to further modify the stop work order and authorize construction. The MVP Joint Venture has resumed construction of those portions of the pipeline. However, work on the 3.6-mile segment in the Jefferson National Forest must await a revised authorization, which the MVP Joint Venture is working to obtain.

•

Challenges to FERC Certificate, Court of Appeals for the District of Columbia Circuit (DC Circuit). Multiple parties have sought judicial review of the FERC's order issuing a certificate of convenience and necessity to the MVP Joint Venture and/or the exercise by the MVP Joint Venture of eminent domain authority. There are multiple consolidated petitions before the DC Circuit seeking direct review of the FERC order under the Natural Gas Act in ~~Appalachian Voices, et al. v. FERC, et al., consolidated under Case No. 17-1271. Those petitioners requested a stay~~ of the FERC's order issuing a certificate of convenience and necessity to the MVP Joint Venture and/or the exercise by the MVP Joint Venture of eminent domain authority. There are multiple consolidated petitions before the DC Circuit seeking direct review of the FERC order under the Natural Gas Act in Appalachian Voices, et al. v. FERC, et al., consolidated under Case No. 17-1271. Those petitioners requested a stay of the FERC's

order pending the resolution of the petitions, which the FERC and the MVP Joint Venture opposed. The DC Circuit

denied the request for a stay on August 30, 2018. On February 19, 2019, the DC Circuit issued an order rejecting the challenges to the FERC’s order issuing a certificate of convenience and necessity to the MVP Joint Venture and certain challenges to the exercise by MVP of eminent domain authority. No petitions for rehearing or petitions for rehearing en banc were filed by the April 5, 2019 deadline. The mandate was issued on April 17, 2019. Another group of parties filed a complaint in the U.S. District Court for the District of Columbia asserting that the FERC's order issuing certificates is unlawful on constitutional and other grounds in Bold Alliance, et al. v. FERC, et al., Case No. 1:17-cv-01822-RJL. The district court plaintiffs seek declaratory relief as well as an injunction preventing the MVP Joint Venture from developing its project or exercising eminent domain authority. In December 2017 and January 2018, the FERC and the MVP Joint Venture, respectively, moved to dismiss the petitions for lack of subject matter jurisdiction. The court granted the motion and dismissed this complaint on September 28, 2018. On October 26, 2018, plaintiffs appealed to the DC Circuit in Bold Alliance, et al. v. FERC, et al., Case No. 18-5322. On December 3, 2018, the FERC, as appellee, filed a joint motion with the appellants to hold Case No. 18-5322 in abeyance pending completion of the ongoing appeals of the final agency orders related to the MVP certificate in consolidated Case No. 17-1271 and Atlantic Coast Pipeline’s certificate. The MVP Joint Venture filed a motion to dismiss the case as to some of the plaintiffs. On February 15, 2019, the DC Circuit entered an order holding this appeal in abeyance pending rulings on the appeals from the FERC proceedings. If this challenge were successful, it could result in the MVP Joint Venture's certificate of convenience and necessity being vacated and/or additional proceedings before the FERC, the outcome of which EQM cannot predict.

•

Mountain Valley Pipeline, LLC v. 6.56 Acres of Land et al., Case No. 18-1159, Fourth Circuit Court of Appeals. Several landowners have filed challenges in various U.S. District Courts to the condemnation proceedings by which the MVP Joint Venture obtained access to their property. In each case, the district court found that the MVP Joint Venture was entitled to immediate possession of the easements, and the landowners appealed to the Fourth Circuit. The Fourth Circuit consolidated these cases and held oral argument in September 2018. On February 5, 2019, the Fourth Circuit issued an opinion affirming the decisions of the U.S. District Courts granting the MVP Joint Venture immediate access for construction of the pipeline. On March 15, 2019, the Fourth Circuit issued another opinion finding that the MVP Joint Venture did not have to condemn the interest of coal owners, nor are coal owners entitled to assert claims in the condemnation proceedings for lost coal on tracts for which they do not own a surface interest being condemned. On July 3, 2019, a group of landowners filed a writ of certiorari with the United States Supreme Court related to the Fourth Circuit’s ruling on immediate access. The MVP Joint Venture anticipates that the Supreme Court will issue its determination to accept or reject the case during the fourth quarter of 2019.

•

Greenbrier River Watershed Ass’n v. WVDEP, Circuit Court of Summers County, West Virginia. In August 2017, the Greenbrier River Watershed Association appealed the MVP Joint Venture's Natural Stream Preservation Act Permit obtained from the West Virginia Environmental Quality Board (WVEQB) for the Greenbrier River crossing. Petitioners alleged that the issuance of the permit failed to comply with West Virginia's Water Quality Standards for turbidity and sedimentation. WVEQB dismissed the appeal in June 2018. In July 2018, the Greenbrier River Watershed Association appealed the decision to the Circuit Court of Summers County, asking the court to remand the permit with instructions to impose state-designated construction windows and pre- and post-construction monitoring requirements as well as a reversal of the WVEQB's decision that the permit was lawful. On September 18, 2018, the Circuit Court granted a stay. A hearing on the merits was held on October 23, 2018. The court has not yet issued a decision. In the event of an adverse decision, the MVP Joint Venture would appeal or work with the WVDEP to attempt to resolve the issues identified by the court.

•

WVDEP Consent Order. On March 19, 2019, the WVDEP issued 26 NOVs to the MVP Joint Venture for various construction and sediment and erosion control issues in 2018. MVP and WVDEP have reached a tentative settlement agreement which will be documented as an administrative consent order for the MVP Joint Venture to pay $0.3 million in penalties. The consent order is subject to a state mandated 30-day public comment period. In addition to payment of assessed penalties, the MVP Joint Venture is required to submit a corrective action plan to resolve any outstanding permit compliance matters.

•

Sierra Club et al. v. U.S. Dep’t of Interior et al., Case No. 18-1082, Fourth Circuit Court of Appeals. On August 6, 2018, the Fourth Circuit held that National Park Service (NPS) acted arbitrarily and capriciously in granting the Atlantic Coast Pipeline (ACP) a right-of-way permit across the Blue Ridge Parkway. Specifically, the Fourth Circuit found that the permit cited the wrong source of legal authority and the NPS failed to make a “threshold determination that granting the right-of-way is ‘not inconsistent with the use of such lands for parkway purposes’ and the overall National Park System to which it belongs.” Even though the MVP Joint Venture is not named in the ACP litigation, the MVP route crosses the Blue Ridge Parkway roughly midway between mileposts 246 and 247 of the pipeline route and implicates some the same deficiencies addressed by the Court. MVP elected to request that the NPS temporarily

~~Mountain Valley Pipeline, LLC v. 6.56 Acres of Land et al., Case No. 18-1159, Fourth Circuit Court of Appeals.~~ Several landowners have filed challenges in various U.S. District Courts to the condemnation proceedings by which the MVP Joint Venture obtained access to their property. In each case, the district court found that the MVP Joint Venture was entitled to immediate possession of the easements, and the landowners appealed to the Fourth Circuit. The Fourth Circuit consolidated these cases and held oral argument in September 2018. On February 5, 2019, the Fourth Circuit issued an opinion affirming the decisions of the U.S. District Courts granting the MVP Joint Venture immediate access for construction of the pipeline. On March 15, 2019, the Fourth Circuit issued another opinion finding that the MVP Joint Venture did not have to condemn the interest of coal owners, nor are coal owners entitled to assert claims in the condemnation proceedings for lost coal on tracts for which they do not own a surface interest being condemned.46

~~Greenbrier River Watershed Ass’n v. WVDEP, Circuit Court of Summers County, West Virginia.~~ In August 2017, the Greenbrier River Watershed Association appealed the MVP Joint Venture's Natural Stream Preservation Act Permit obtained from the West Virginia Environmental Quality Board (WVEQB) for the Greenbrier River crossing. Petitioners alleged that the issuance of the permit failed to comply with West Virginia's Water Quality Standards for turbidity and sedimentation. WVEQB dismissed the appeal in June 2018. In July 2018, the Greenbrier River Watershed Association appealed the decision to the Circuit Court of Summers County, asking the court to remand the permit with instructions to impose state-designated construction windows and pre- and post-construction monitoring requirements as well as a reversal of the WVEQB's decision that the permit was lawful. On September 18, 2018, the Circuit Court granted a stay. A hearing on the merits was held on October 23, 2018. The court has not yet issued a decision. In the event of an adverse decision, the MVP Joint Venture would appeal or work with the WVDEP to attempt to resolve the issues identified by the court.

~~WVDEP Consent Order~~. On March 19, 2019, the West Virginia DEP (WVDEP) issued 26 notices of violation to MVP for various construction and sediment and erosion control issues in 2018. MVP and WVDEP have reached a tentative settlement agreement which will be documented as an administrative consent order for MVP to pay $0.3 million in penalties. Upon execution, the consent order will be subject to a state mandated 30-day public comment period. In addition to payment of assessed penalties, MVP is required to submit a corrective action plan to resolve any outstanding permit compliance matters.

~~Sierra Club et al. v. U.S. Dep’t of Interior et al., Case No. 18-1082, Fourth Circuit Court of Appeals~~. On August 6, 2018, the Fourth Circuit held that National Park Service (NPS) acted arbitrarily and capriciously in granting the Atlantic Coast Pipeline (ACP) a right-of-way permit across the Blue Ridge Parkway. Specifically, the Fourth Circuit found that the permit cited the wrong source of legal authority and the NPS failed to make a “threshold determination that granting the right-of-way is ‘not inconsistent with the use of such lands for parkway purposes’ and the overall National Park System to which it belongs.” Even though MVP is not named in the ACP litigation, the MVP route crosses the Blue Ridge Parkway roughly midway between mileposts 246 and 247 of the pipeline route and implicates some the same deficiencies addressed by the Court. MVP elected to request that the NPS temporarily suspend its Blue Ridge Parkway permit until the deficiencies identified in the ACP litigation are resolved. While the MVP and ACP rights-of-way share some of the same regulatory issues, unlike ACP the portion of the MVP pipeline that crosses the Blue Ridge Parkway is completely constructed. NPS granted the MVP Joint Venture the ability to continue final restoration efforts on

that portion of the pipeline during the course of the suspended permit. The MVP Joint Venture is working with the NPS to address MVP-related right-of-way issues.

Other Proceedings that May Affect the MVP Project

~~Cowpasture River Preservation Association, et al. v. U.S. Forest Service, et al., Case No. 18-1144,~~ ~~Fourth Circuit Court of Appeals.~~ On December 13, 2018, in an unrelated case involving the Atlantic Coast Pipeline, the Fourth Circuit held that the Forest Service, which is part of the Department of Agriculture, lacked the authority to grant rights-of-way for oil and gas pipelines to cross the Appalachian Trail. Although the MVP Joint Venture obtained its grant to cross the Appalachian Trail from the BLM, a part of the Department of Interior, the rationale of the Fourth Circuit's opinion could apply to the BLM as well. On February 25, 2019, the Fourth Circuit denied Atlantic Coast Pipeline’s petition for en banc rehearing. The MVP Joint Venture anticipates that the Atlantic Coast Pipeline will file an appeal with the United States Supreme Court. The MVP Joint Venture is pursuing multiple options to address the Appalachian Trail issue, including but not limited to, administrative and legislative options.

~~Grand Jury Subpoena~~. On January 7, 2019, the MVP Joint Venture received a letter from the U.S. Attorney's Office for the Western District of Virginia stating that it and the EPA are investigating potential criminal and/or civil violations of the Clean Water Act and other federal statutes as they relate to the construction of the MVP. The January 7, 2019 letter requested that the MVP Joint Venture and its members, contractors, suppliers and other entities involved in the construction of the MVP preserve documents related to the MVP generated from September 1, 2018 to the present. In a telephone call on February 4, 2019, the U.S. Attorney's Office confirmed that it has opened a criminal investigation. On February 11, 2019, the MVP Joint Venture received a grand jury subpoena from the U.S. Attorney's Office for the Western District of Virginia requesting certain documents related to the MVP from August 1, 2018 to the present. The MVP Joint Venture is complying with the letter and subpoena but cannot predict whether any action will ultimately be brought by the U.S. Attorney's Office or what the outcome of such an action would be. The MVP Joint Venture began a rolling production of documents responsive to the subpoena after the U.S. Attorney’s office narrowed its subpoena inquiry to five farms in Virginia containing 20 streams or wetlands.

~~Paylor et al. v. Mountain Valley Pipeline, LLC, Case No. CL18-4874-00, Circuit Court of Henrico County.~~ On December 7, 2018, the Virginia Department of Environmental Quality and the State Water Control Board filed a lawsuit against the MVP Joint Venture in the Circuit Court of Henrico County alleging violations of Virginia's State Water Control Law, Water Resources and Wetlands Protection Program, and Water Protection Permit Program Regulations at sites in Craig, Franklin, Giles, Montgomery and Roanoke Counties, Virginia. The MVP Joint Venture answered the suit on January 11, 2019, stating that it does not admit and will contest the allegations. The MVP Joint Venture has initiated settlement negotiations to resolve this matter. The MVP Joint Venture anticipates that a resolution could result in penalties and injunctive relief designed to assure compliance with relevant environmental laws and regulations. Shortly after the filing of this suit, the Virginia State Water Control Board (VSWCB) voted to reconsider/schedule a hearing to revoke MVP's Clean Water Act Section 401 certification. On March 1, 2019, the VSWCB voted unanimously to end its consideration of whether to revoke MVP’s Clean Water Act Section 401 Certification.

•

Cowpasture River Preservation Association, et al. v. U.S. Forest Service, et al., Case No. 18-1144, Fourth Circuit Court of Appeals. On December 13, 2018, in an unrelated case involving the ACP, the Fourth Circuit held that the USFS, which is part of the Department of Agriculture, lacked the authority to grant rights-of-way for oil and gas pipelines to cross the Appalachian Trail. Although the MVP Joint Venture obtained its grant to cross the Appalachian Trail from the BLM, a part of the Department of Interior, the rationale of the Fourth Circuit's opinion could apply to the BLM as well. On February 25, 2019, the Fourth Circuit denied ACP’s petition for en banc rehearing. The federal government and ACP filed petitions to the United States Supreme Court on June 26, 2019 seeking judicial review of the Fourth Circuit's decision. The MVP Joint Venture anticipates that the Supreme Court will issue its determination to accept or reject the case during the fourth quarter of 2019. The MVP Joint Venture is pursuing multiple options to address the Appalachian Trail issue, including but not limited to, administrative, regulatory and legislative options.

•

Grand Jury Subpoena. On January 7, 2019, the MVP Joint Venture received a letter from the U.S. Attorney's Office for the Western District of Virginia stating that it and the EPA are investigating potential criminal and/or civil violations of the Clean Water Act and other federal statutes as they relate to the construction of the MVP. The January 7, 2019 letter requested that the MVP Joint Venture and its members, contractors, suppliers and other entities involved in the construction of the MVP preserve documents related to the MVP generated from September 1, 2018 to the present. In a telephone call on February 4, 2019, the U.S. Attorney's Office confirmed that it has opened a criminal investigation. On February 11, 2019, the MVP Joint Venture received a grand jury subpoena from the U.S. Attorney's Office for the Western District of Virginia requesting certain documents related to the MVP from August 1, 2018 to the present. The MVP Joint Venture is complying with the letter and subpoena but cannot predict whether any action will ultimately be brought by the U.S. Attorney's Office or what the outcome of such an action would be. The MVP Joint Venture began a rolling production of documents responsive to the subpoena after the U.S. Attorney’s office narrowed its subpoena inquiry to five farms in Virginia containing 20 streams or wetlands.

•

Paylor et al. v. Mountain Valley Pipeline, LLC, Case No. CL18-4874-00, Circuit Court of Henrico County. On December 7, 2018, the Virginia Department of Environmental Quality and the State Water Control Board filed a lawsuit against the MVP Joint Venture in the Circuit Court of Henrico County alleging violations of Virginia's State Water Control Law, Water Resources and Wetlands Protection Program, and Water Protection Permit Program Regulations at sites in Craig, Franklin, Giles, Montgomery and Roanoke Counties, Virginia. The MVP Joint Venture answered the suit on January 11, 2019, stating that it does not admit and will contest the allegations. The MVP Joint Venture has initiated settlement negotiations to resolve this matter. The MVP Joint Venture anticipates that a resolution could result in penalties and injunctive relief designed to assure compliance with relevant environmental laws and regulations.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in EQM's Annual Report on Form 10-K for the year ended December 31, 2018 other than the risks described below.

We have entered into joint ventures, and may in the future enter into additional or modify existing joint ventures, that might restrict our operational and corporate flexibility. In addition, these joint ventures are subject to many of the same operational risks to which we are subject.

We have entered into joint ventures to construct the MVP and MVP Southgate projects and a joint venture relating to Eureka Midstream Holdings, LLC and may in the future enter into additional joint venture arrangements with third parties. Joint venture arrangements may restrict our operational and corporate flexibility. Because we do not control all of the decisions of the MVP Joint Venture or the joint venture relating to Eureka Midstream Holdings, LLC, it may be difficult or impossible for us to cause the joint venture to take actions that we believe would be in our or the joint venture's best interests. For example, we cannot unilaterally cause the distribution of cash by the MVP Joint Venture. Moreover, joint venture arrangements involve various risks and uncertainties, such as committing us to fund operating and/or capital expenditures, the timing and amount of which we may not control, and our joint venture partners may not satisfy their financial obligations to the joint venture.

In addition, the operations of the MVP Joint Venture, the joint venture relating to Eureka Midstream Holdings, LLC and any joint ventures we may enter into in the future are subject to many of the same operational risks to which we are subject~~to.~~

A downgrade of our credit ratings, including in connection with the MVP project or the credit ratings of our customers, which are determined by independent third parties, could impact our liquidity, access to capital, and costs of doing business.

If any credit rating agency downgrades our credit ratings, including for reasons relating to the MVP project or the credit ratings of EQM' customers, our access to credit markets may be limited, our borrowing costs could increase, and we may be required to provide additional credit assurances in support of commercial agreements, such as joint venture agreements and construction contracts, the amount of

which may be substantial. Our credit ratings by Moody's, S&P and Fitch were Ba1, BBB- and BBB-, respectively, as of

June 30, 2019. In March ~~31, 2019. On March 22,~~ 2019, both S&P and Fitch affirmed ~~our~~EQM’s BBB- credit rating but revised ~~our~~EQM’s credit rating

outlook from stable to negative, citing uncertainty around the completion of the MVP project, the MVP project’s increased

costs and pressure placed on ~~our~~EQM’s credit measures and balance sheet. On June 28, 2019, Moody’s affirmed EQM’s Ba1 credit rating but noted that the delay of the targeted full in-service date for the MVP project to mid-2020 and related increase in project cost were a credit negative event for EQM. In order to be considered investment grade,

we must be rated Baa3 or higher by Moody's, BBB- or higher by S&P and BBB- or higher by Fitch. Our non-investment

grade credit rating by Moody's and any future downgrade of our S&P and/or Fitch credit ratings to non-investment grade

may result in greater borrowing costs and collateral requirements than would be available to us if all of ~~all~~ our credit ratings were investment grade. Our ability to access capital markets could also be limited by economic, market or other disruptions. An increase in the level of our indebtedness, further delays in the MVP project or increases to the MVP project cost or deterioration of the credit ratings of our customers in the future may result in a downgrade in the ratings that are assigned to our debt. Credit rating agencies perform an independent analysis when assigning credit ratings. This analysis includes a number of

criteria such as business composition, market and operational risks, as well as various financial tests. Credit rating agencies

continue to review the criteria for industry sectors and various debt ratings and may make changes to those criteria from time to

time. Credit ratings are subject to revision or withdrawal at any time by the ratings agencies.

Our Series A Preferred Units have rights, preferences and privileges that are not held by, and are preferential to the rights of, holders of EQM common units.

Our Series A Perpetual Convertible Preferred Units representing limited partner interests in EQM (our “Series A Preferred Units”) rank senior to our common units with respect to distribution rights and rights upon liquidation. These preferences could adversely affect the market price for our common units or could make it more difficult for us to sell our common units in the future.

In addition, until the conversion of the Series A Preferred Units into common units or their redemption in connection with a change of control, holders of the Series A Preferred Units will receive cumulative quarterly distributions initially at a fixed rate of $1.0364 per Series A Preferred Unit per quarter for the first twenty distribution periods (the “initial distribution period”) and thereafter at a floating rate based on a spread to the 3-month LIBOR as of the second banking day prior to the beginning of the applicable distribution period. We will not be entitled to pay any distributions on any junior securities, including any of the common units, prior to paying the quarterly distribution payable on the Series A Preferred Units, including any previously accrued and unpaid distributions. In addition, because the distribution rate on our Series A Preferred Units will become a floating rate following the initial distribution period, we are unable to predict the amount of such distributions. Our obligation to pay distributions on our Series A Preferred Units could impact our liquidity and reduce the amount of cash flow available for working capital, capital expenditures, growth opportunities, acquisitions and other general partnership purposes. Our obligations to the holders of the Series A Preferred Units could also limit our ability to obtain additional financing or could increase our borrowing costs, which could have an adverse effect on our financial condition.

The terms of our Series A Preferred Units contain covenants that may limit our business flexibility.

The terms of our Series A Preferred Units contain covenants preventing us from taking certain actions without the approval of the holders of two-thirds (66²/₃%) of the outstanding Series A Preferred Units, voting as a separate class. The need to obtain the approval of holders of the Series A Preferred Units before taking these actions could impede our ability to take certain actions that management or the Board of Directors of the EQM general partner may consider to be in the best interests of our unitholders.

The affirmative vote of two-thirds (66²/₃%) of the outstanding Series A Preferred Units, voting as a separate class, is necessary to, among other things, (i) amend our partnership agreement or certificate of limited partnership in any manner that is adverse (other than in a de minimis manner) to any of the rights, preferences and privileges of the Series A Preferred Units, (ii) issue any additional Series A Preferred Units or any class or series of partnership interests that, with respect to distributions on such partnership interests or distributions in respect of such partnership interests upon our liquidation, dissolution and winding up,

rank equal to or senior to the Series A Preferred Units, subject to certain exceptions, (iii) reduce the distribution amount applicable to the Series A Preferred Units, change the form of payment of distributions on the Series A Preferred Units, defer the date from which distributions on the Series A Preferred Units will accrue, cancel any accrued and unpaid distributions on the Series A Preferred Units or any interest accrued thereon (including any unpaid distributions or partial distributions on the Series A Preferred Units), or change the seniority rights of the Series A Preferred Units as to the payment of distributions in relation to the holders of any other class or series of partnership interests in EQM, (iv) reduce the amount payable or change the

form of payment to the record holders of the Series A Preferred Units upon the voluntary or involuntary liquidation, dissolution or winding up, or sale of all or substantially all of the assets, of EQM, or change the seniority of the liquidation preferences of the record holders of the Series A Preferred Units in relation to the rights of the holders of any other class or series of partnership interests in EQM upon the liquidation, dissolution and winding up of EQM or (v) make the Series A Preferred Units redeemable or convertible at the option of EQM other than as set forth in our partnership agreement.

Upon conversion of our Series A Preferred Units, holders may receive less valuable consideration than expected because the value of our common units may decline after such holders or us exercise their conversion right but before we settle our conversion obligation.

Each holder of our Series A Preferred Units may elect to convert all or any portion of the Series A Preferred Units owned by it into our common units initially on a one-for-one basis, subject to customary anti-dilution adjustments and an adjustment for any distributions that have accrued but not been paid when due and partial period distributions (referred to as the ~~“conversion rate”)~~conversion rate), at any time (but not more often than once per fiscal quarter) after April 10, 2021 (or upon our earlier liquidation, dissolution or winding up), provided that any conversion is for at least $30 million (calculated based on the closing price of our common units on the trading day preceding notice of the conversion) or such lesser amount if such conversion relates to all of a holder’s remaining Series A Preferred Units.

EQM may elect to convert all or any portion of the Series A Preferred Units into common units at any time (but not more often than once per quarter) after April 10, 2021 if (i) the common units are listed for, or admitted to, trading on a national securities exchange, (ii) the closing price per common unit on the national securities exchange on which the common units are listed for, or admitted to, trading exceeds $68.28 for the 20 consecutive trading days immediately preceding notice of the conversion, (iii) the average daily trading volume of the common units on the national securities exchange on which the common units are listed for, or admitted to, trading exceeds 500,000 common units for the 20 consecutive trading days immediately preceding notice of the conversion, (iv) we have an effective registration statement on file with the SEC covering resales of the common units to be received by such holders upon any such conversion and (v) we have paid all accrued quarterly distributions in cash to the holders.

Any conversion of Series A Preferred Units to common units, whether at the holders’ election or at our election, would increase the number of common units outstanding, which in turn may impact the amount of any distributions paid in respect of the common units.

In addition, converting holders of our Series A Preferred Units will be exposed to fluctuations in the value of our common units during the period from the date such holder surrenders Series A Preferred Units for conversion until the date we settle our conversion obligation. Upon conversion, we will be required to deliver our common units no later than two business days (in the case of a conversion initiated by the holders) or five business days (in the case of a conversion initiated by EQM) following the applicable date on which notice of such conversion was delivered. Accordingly, if the price of our common units decreases during this period, the value of the common units that holders of our Series A Preferred Units receive will be adversely affected and would be less than the conversion value of the Series A Preferred Units on the applicable notice date.

We may issue additional common units and, subject to certain limitations, other equity interests ranking equal or junior to the Series A Preferred Units without unitholder approval, which would dilute our common unitholders' existing ownership interests.

Our partnership agreement does not limit the number of additional limited partner interests that, with respect to distributions on such partnership interests and distributions upon our liquidation, dissolution and winding up, rank junior to the Series A Preferred Units, including our common units and Class B units, thatwe may issue at any time without the approval of our unitholders. Subject to certain limited exceptions, the issuance of additional Series A Preferred Units and partnership interests that rank equal to or senior to the Series A Preferred Units requires the consent of the holders of two-thirds (66²/₃%) of the outstanding Series A Preferred Units.The issuance by us of additional common units or other equity securities of equal or senior rank will have the following effects:

our existing unitholders' proportionate ownership interest in us will decrease;

the amount of distributable cash flow on each unit may decrease;

the ratio of taxable income to distributions may increase;

the relative voting strength of each previously outstanding unit may be diminished; and

the market price of our common units may decline.

Integration of businesses or assets acquired in past or future acquisitions with our existing business will be a complex and time-consuming process. A failure to successfully integrate the acquired business or assets with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations or cash available for distribution to our unitholders.

The difficulties of integrating past and future acquisitions with our business include, among other things:

operating a larger combined organization with assets or operations that may extend into new geographic areas and lines of business;

integrating gathering systems and other assets, infrastructure and personnel into existing operations, including addressing any new operational focuses or regulatory programs and legacy legal, operational or regulatory challenges of acquired assets or businesses;

addressing the potential diversion of management’s time and attention away from our existing business to address integration or other related issues;

hiring, training or retaining qualified personnel to manage and operate our growing business and assets;

addressing the loss of customers or key ~~employees;~~employees, obtaining new customers and expanding relationships with existing customers;

maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters; and

~~integrating new technology systems for financial reporting~~.


•	integrating new technology systems for financial reporting.

If any of these risks or other unanticipated liabilities or costs were to materialize, we may not realize the desired benefits from past or future acquisitions, which may result in a negative impact to, or a material adverse effect on, our business, financial condition, results of operations, liquidity and ability to make quarterly cash distributions to our unitholders.

Further, we may not be successful in integrating past or future acquisitions into our existing operations within our anticipated timeframe, which may result in unforeseen operational difficulties, capital requirements and expenses, diminish our financial performance or require a disproportionate amount of our management’s attention to address. In addition, acquired businesses or assets may perform at levels below the levels we anticipated at the time of acquiring such businesses due to factors beyond our control. As a result, there can be no assurance that our past or future acquisitions, including our combination with RMP and our acquisition of interests in Eureka Midstream Holdings, LLC and Hornet Midstream Holdings, LLC, will deliver the benefits anticipated by us, and any failure to create such benefits may result in a negative impact to, or material adverse effect on, our business, financial condition, results of operations, liquidity and ability to make quarterly cash distributions to our unitholders.

Item 5. Other Information

As previously reported on June 18, 2019, Phillip D. Swisher, Vice President and Chief Accounting Officer of the New EQM General Partner, the general partner of EQM, will resign from the New EQM General Partner and Equitrans Midstream, in each case effective as of July 31, 2019.

On July 24, 2019, the New EQM General Partner’s Board of Directors appointed Brian P. Pietrandrea as Controller of the New EQM General Partner, effective as of July 31, 2019. In his role as Controller of the New EQM General Partner, Mr. Pietrandrea will serve as the principal accounting officer of the New EQM General Partner. Equitrans Midstream’s Board of Directors also appointed Mr. Pietrandrea as Controller, effective as of July 31, 2019.

Mr. Pietrandrea, age 44, was appointed Controller of certain subsidiaries of Equitrans Midstream effective upon the Separation on November 12, 2018. Prior to joining Equitrans Midstream, Mr. Pietrandrea served in various roles of increasing responsibility at a subsidiary of EQT, including Director, Partnership Accounting and Reporting, from October 2013 through February 2017, Controller, from March 2017 through February 2018, and Vice President and Controller, from March 2018 through the Separation.

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Mr. Pietrandrea has no familial relationship with any director, executive officer or person nominated or chosen by the New EQM General Partner to become a director or executive officer. In addition, there are no known related party transactions involving Mr. Pietrandrea, or involving any other “related person” associated with Mr. Pietrandrea, as defined in Regulation S-K, Item 404(a).

Item 6. Exhibits



Exhibit No.	Document Description	Method of Filing
~~2.1~~3.1	Agreement and Plan of Merger, dated as of February 13, 2019, by and among Equitrans Midstream Corporation, EQM Midstream Services, LLC, EQM Midstream Partners, LP, EQGP Services, LLC, EQGP Holdings, LP and the other parties thereto. Equitrans Midstream Corporation will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.	~~Incorporated herein by reference to Exhibit 2.1 to EQM Midstream Partners, LP's Form 8-K (#001-35574) filed on February 14, 2019.~~
~~2.2~~	Purchase and Sale Agreement, dated as of March 13, 2019, by and between EQM Midstream Partners, LP and North Haven Infrastructure Partners II Buffalo Holdings, LLC. Equitrans Midstream Corporation will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.	~~Incorporated herein by reference to Exhibit 2.1 to EQM Midstream Partners, LP's Form 8-K (#001-35574) filed on March 15, 2019.~~
~~3.1(a)~~	~~Certificate of Formation of EQGP Services, LLC (formerly known as EQT GP Services, LLC), dated as of January 29, 2015.~~	~~Incorporated herein by reference to Exhibit 3.3 to EQT GP Holdings, LP's Form S-1 Registration Statement~~ ~~(#333-202053) filed on February 12, 2015.~~
~~3.1(b)~~	~~Certificate of Amendment to Certificate of Formation of EQGP Services, LLC (formerly known as EQT GP Services, LLC), dated as of October 12, 2018.~~	~~Incorporated herein by reference to Exhibit 3.2 to EQGP Holdings, LP's Form 8-K (#001-37380) filed on October 15, 2018.~~
~~3.2(a)~~	~~Second Amended and Restated Limited Liability Company Agreement of EQGP Services, LLC, dated as of October 12, 2018.~~	~~Incorporated herein by reference to Exhibit 3.4 to EQGP Holdings, LP's Form 8-K (#001-37380) filed on October 15, 2018.~~
~~3.2(b)~~	~~First Amendment to Second Amended and Restated Limited Liability Company Agreement of EQGP Services, LLC, dated as of February 22, 2019.~~	~~Incorporated herein by reference to Exhibit 3.5 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on February 22, 2019.~~
~~3.3~~	~~First Amendment to Second Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of February 22, 2019.~~	~~Incorporated herein by reference to Exhibit 3.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on February 22, 2019.~~
~~3.4~~	~~Third Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of February 22, 2019.~~	~~Incorporated herein by reference to Exhibit 3.2 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on February 22, 2019.~~
~~3.5~~	Fourth Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of April 10, 2019.	Incorporated herein by reference to Exhibit 3.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on April 10, 2019.
~~3.6~~4.1	~~Certificate of Amendment to Certificate of Limited Partnership of EQM Midstream Partners, LP, dated as of February 22, 2019.~~	~~Incorporated herein by reference to Exhibit 3.3 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on February 22, 2019.~~
~~4.1~~	Registration Rights Agreement, dated as of April 10, 2019, by and among EQM Midstream Partners, LP and the Purchasers party thereto. Equitrans Midstream Corporation will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.	Incorporated herein by reference to Exhibit 4.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on April 10, 2019.
~~10.1(a)~~10.1	Convertible Preferred Unit Purchase Agreement, dated as of March 13, 2019, by and among EQM Midstream Partners, LP and the Purchasers party thereto. Equitrans Midstream Corporation will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.	~~Incorporated herein by reference to Exhibit 10.1 to EQM Midstream Partners, LP's Form 8-K (#001-35574) filed on March 15, 2019.~~



~~10.1(b)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and Kayne Anderson MLP/Midstream Investment Company.~~	~~Incorporated herein by reference to Exhibit 10.1 to EQM Midstream Partners, LP's Form 8-K (#001-35574) filed on March 19, 2019.~~
~~10.1(c)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and Kayne Anderson Midstream/Energy Fund, Inc.~~	~~Incorporated herein by reference to Exhibit 10.2 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.1(d)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and Centaurus Capital LP.~~	~~Incorporated herein by reference to Exhibit 10.3 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.1(e)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and MTP Energy Opportunities Fund II LLC.~~	~~Incorporated herein by reference to Exhibit 10.4 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.1(f)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and MTP Energy Master Fund LLC.~~	~~Incorporated herein by reference to Exhibit 10.5 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.1(g)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and Tortoise Direct Opportunities Fund II, LP.~~	~~Incorporated herein by reference to Exhibit 10.6 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.1(h)~~	~~Joinder Agreement, dated as of March 18, 2019, by and between EQM Midstream Partners, LP and Portcullis Partners, LP.~~	~~Incorporated herein by reference to Exhibit 10.7 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on March 19, 2019.~~
~~10.2~~	~~Amended and Restated EQGP Services, LLC 2012 Long-Term Incentive Plan, dated as of February 22, 2019.~~	~~Incorporated herein by reference to Exhibit 10.1 to EQM Midstream Partners, LP's Form 8-K (#001-35574) filed on February 22, 2019.~~
~~10.3~~	Amended and Restated Omnibus Agreement, dated as of March 31, 2019, by and among Equitrans Midstream Corporation, EQM Midstream Partners, LP, EQGP Services, LLC and, for limited purposes, EQM Midstream Services, LLC.	~~Filed herewith as Exhibit 10.3.~~
~~10.4~~	Amendment No. 62 to ~~Jupiter~~ Gas Gathering Agreement for the WG-100 Gas Gathering System, dated ~~as of March~~June 1, 2019, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by ~~three asterisks~~[***].	Filed herewith as Exhibit 10.1.
10.2	Amendment No. 3 to Gas Gathering for Mercury, Pandora, Pluto, and Saturn Gas Gathering Systems, dated June 1, 2019, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by [***].	Filed herewith as Exhibit ~~10.4.~~ 10.2.
~~10.5~~10.3	~~Letter~~Second Amendment to Gas Gathering and Compression Agreement, dated ~~as of March~~June 1, 2019, by and among ~~RM Partners LP, Equitrans, L.P.,~~ Rice Drilling B, LLC, ~~EQM Gathering OPCO, LLC and~~ Alpha Shale Resources, LP and RMP Partners, LP. Specific items in this exhibit have been redacted, as marked by ~~three asterisks~~ [***].	Filed herewith as Exhibit ~~10.5.~~ 10.3.
~~31.1~~10.4	Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. EQTR 20242-852, dated as of September 24, 2014 and amended through April 1, 2019, by and between Equitrans, L.P. and EQT Energy, LLC.	Filed herewith as Exhibit 10.4.
10.5	Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. CW2250463-1296, dated as of January 8, 2016 and amended through April 1, 2019, by and between Equitrans, L.P. and EQT Energy, LLC.	Filed herewith as Exhibit 10.5.
31.1	Rule 13(a)-14(a) Certification of Principal Executive Officer.	Filed herewith as Exhibit 31.1.
31.2	Rule 13(a)-14(a) Certification of Principal Financial Officer.	Filed herewith as Exhibit 31.2.
32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.	Furnished herewith as Exhibit 32.
101	Inline Interactive Data File	Filed herewith as Exhibit ~~101~~101.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Filed herewith as Exhibit 104.

4552

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	EQM Midstream Partners, LP
	(Registrant)

	By:	EQGP Services, LLC, its General Partner



	By:	/s/ ~~THOMAS F. KARAM~~Kirk R. Oliver
		~~Thomas F. Karam~~Kirk R. Oliver
		Senior Vice President and Chief ~~Executive~~Financial Officer

Date: ~~April~~July 30, 2019

4653



or

¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE TRANSITION PERIOD FROM TO

	COMMISSION FILE NUMBER	001-35574



~~DELAWARE~~Delaware		37-1661577
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)



~~625 Liberty Avenue, Suite 2000, Pittsburgh, Pennsylvania~~	~~15222~~
~~(Address of principal executive offices)~~	~~(Zip code)~~


Title of each class	Trading Symbol	Name of each exchange on which registered
~~(412) 395-2688~~ ~~(Registrant's telephone number, including area code)~~ Common Units Representing Limited Partner Interests	EQM	New York Stock Exchange



Large Accelerated Filerx	☒		Accelerated Filer ¨	☐	Emerging Growth Company ¨	☐
Non-Accelerated Filer ¨	☐	(Do not check if a smaller reporting company)	Smaller Reporting Company¨	☐



(Mark One)

x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



			Page No.

Glossary of Commonly Used Terms, Abbreviations and Measurements			3

Part I.	Financial Information:

Item 1.		Financial Statements (Unaudited):

		Statements of Consolidated Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2019 and 2018	5

		Statements of Consolidated Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2019 and 2018	7

		Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019 and December 31, 2018	8

		Statements of Consolidated Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2019 and 2018	9

		Notes to Consolidated Financial Statements	10

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2429

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3542

Item 4.		Controls and Procedures	3643

Part II.	Other Information:

Item 1.		Legal Proceedings	37

~~Item 1A.~~		~~Risk Factors~~	40

~~Item 6.~~		~~Exhibits~~	44

~~Signature~~Item 1A.		46Risk Factors	47

Item 5.		Other Information	50

Item 6.		Exhibits	52

Signature			53



Abbreviations	Measurements
ASU – Accounting Standards Update	Btu = one British thermal unit
FASB –Financial Accounting Standards Board	BBtu = billion British thermal units
FERC – U.S. Federal Energy Regulatory Commission	Bcf = billion cubic feet
GAAP – United States Generally Accepted Accounting Principles	Mcf = thousand cubic feet
IDRs – incentive distribution rights	MMcf = million cubic feet
IPO – Initial Public Offering	MMgal = million gallons
SEC – U.S. Securities and Exchange Commission


(b)	Operating revenues included related party revenues from EQT Corporation (NYSE: EQT) (EQT) of ~~$284.5~~$284.0 million and ~~$265.6~~$285.3 million for the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and $568.5 million and $550.9 million for the six months ended June 30, 2019, respectively. See Note 7.8.


(d)	See Note 3 for disclosure regarding impairment of certain of EQM's long-lived assets.


(e)	Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note 8.9.


~~(e)~~(f)	Net interest expense included interest income on the Preferred Interest in EQT Energy Supply, LLC (EES) of $1.6 million and $1.7 million for the three months ended ~~March 31,~~June 30, 2019 and 2018, respectively, and $3.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively.


~~(f)~~(g)	See Note 12 for further disclosure on EQM's calculation of net income per limited partner unit (basic and diluted).


(h)	Represents the cash distributions declared related to the period presented. See Note ~~11.~~12.


(a)	As discussed in Notes 1 and 2, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the Drop-Down Transaction and the EQM-RMP Merger because these transactions were between entities under common control.


2.	Acquisitions and Mergers



	Goodwill and Purchase Price Allocation
	(Thousands)
Estimated fair value of RMP, EQM Olympus, Strike Force^(a) and EQM WV	$	4,014,984

Estimated Fair Value of Assets Acquired and Liabilities Assumed:
Current assets^(b)	132,459
Intangible assets^(c)	623,200
Property and equipment, net^(d)	2,265,900
Other non-current assets	118
Current liabilities^(b)	(117,124		)
RMP $850 Million Facility^(e)	(266,000		)
Other non-current liabilities^(e)	(9,323		)
Total estimated fair value of assets acquired and liabilities assumed	2,629,230
Goodwill as of November 13, 2017^(f)	1,385,754
Impairment of goodwill ^(g)	261,941
Goodwill as of December 31, 2018	$	1,123,813


(b)	~~Includes $23.8 million~~See Note 3 for disclosure regarding impairment of ~~cash and cash equivalents and~~ ~~$50.0 million~~certain of ~~cash escrowed as of March 31, 2019 associated with the Bolt-on Acquisition (as defined in Note 2).~~ EQM's long-lived assets.


	March 31, 2019			December 31, 2018			June 30, 2019			December 31, 2018
	(Thousands, except number of units)						(Thousands, except number of units)
ASSETS
Current assets:
Cash and cash equivalents	$	23,839		$	17,515		$	16,625		$	17,515
Accounts receivable (net of allowance for doubtful accounts of $792 and $75 as of March 31, 2019 and December 31, 2018, respectively) ^(a)	259,340			254,390
Accounts receivable (net of allowance for doubtful accounts of $138 and $75 as of June 30, 2019 and December 31, 2018, respectively) ^(a)							274,790			254,390
Other current assets	13,286			14,909			21,971			14,909
Total current assets	296,465			286,814			313,386			286,814

Property, plant and equipment	6,639,047			6,367,530			8,158,272			6,367,530
Less: accumulated depreciation	(643,662		)	(560,902		)	(783,130		)	(560,902		)
Net property, plant and equipment	5,995,385			5,806,628			7,375,142			5,806,628

Investment in unconsolidated entity	1,673,325			1,510,289			2,066,330			1,510,289
Goodwill	1,123,813			1,123,813			1,237,456			1,123,813
Net intangible assets	565,726			576,113			868,965			576,113
Restricted cash ^(b)	50,000			—
Other assets	183,871			152,464			201,891			152,464
Total assets	$	9,888,585		$	9,456,121		$	12,063,170		$	9,456,121

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable ^(c)	$	143,186		$	207,877
Accounts payable ^(b)							$	179,448		$	207,877
Due to Equitrans Midstream	65,932			44,509			76,863			44,509
Capital contribution payable to the MVP Joint Venture	156,412			169,202			356,223			169,202
Accrued interest	41,302			80,199			73,443			80,199
Accrued liabilities	20,165			20,672			38,265			20,672
Total current liabilities	426,997			522,459			724,242			522,459

Credit facility borrowings	1,082,000			625,000			1,372,500			625,000
Senior notes	3,457,981			3,456,639			3,459,323			3,456,639
Regulatory and other long-term liabilities	67,414			38,724			81,093			38,724
Total liabilities	5,034,392			4,642,822			5,637,158			4,642,822

Equity:
Common (200,457,630 and 120,457,638 units issued and outstanding at March 31, 2019 and December 31, 2018, respectively)	4,852,205			4,783,673
Class B (7,000,000 and 0 units issued and outstanding at March 31, 2019 and December 31, 2018, respectively)	1,988			—
General partner (0 and 1,443,015 units issued and outstanding at March 31, 2019 and December 31, 2018, respectively)	—			29,626
Series A Preferred Units (24,605,291 and 0 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)							1,181,292			—
Common (200,457,630 and 120,457,638 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)							4,748,269			4,783,673
Class B (7,000,000 and 0 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)							6,356			—
General partner (0 and 1,443,015 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)							—			29,626
Noncontrolling interest ^(c)							490,095			—
Total equity	4,854,193			4,813,299			6,426,012			4,813,299
Total liabilities and equity	$	9,888,585		$	9,456,121		$	12,063,170		$	9,456,121


(a)	Accounts receivable as of ~~March 31,~~June 30, 2019 and December 31, 2018 included approximately ~~$182.2~~$126.7 million and $174.8 million, respectively, of related party accounts receivable from EQT.


(b)	~~Includes $50.0 million of cash escrowed as of March 31, 2019 associated with the Bolt-on Acquisition (as defined in Note 2).~~


~~(c)~~	Accounts payable as of December 31, 2018 included approximately $34.0 million of related party accounts payable to EQT. There was no related party balance with EQT included in accounts payable as of ~~March 31,~~June 30, 2019.


(c)	Noncontrolling interest as of June 30, 2019 represents third-party ownership in Eureka Midstream Holdings, LLC (Eureka Midstream). See Note 2 for further information.


							Limited Partners
	Predecessor Equity			Noncontrolling Interest			Common Units			Class B Units			General Partner			Total Equity						Limited Partners
	(Thousands)																		Predecessor Equity			Series A Preferred Units		Common Units			Class B Units			General Partner			Noncontrolling Interest			Total Equity
Balance at January 1, 2018	$	3,916,434		$	173,472		$	2,147,706		$	—		$	1,252		$	6,238,864		$	3,916,434		$	—	$	2,147,706		$	—		$	1,252		$	173,472		$	6,238,864
Net income	83,132			2,493			129,937			—			47,281			262,843			83,132			—		129,937			—			47,281			2,493			262,843
Capital contributions	—			—			2,749			—			50			2,799			—			—		2,749			—			50			—			2,799
Equity-based compensation plans	168			—			331			—			—			499			168			—		331			—			—			—			499
Distributions paid to unitholders ($1.025 per common unit)	(32,845		)	—			(82,596		)	—			(43,294		)	(158,735		)	(32,845		)	—		(82,596		)	—			(43,294		)	—			(158,735		)
Net contributions from EQT	1,015			—			—			—			—			1,015			1,015			—		—			—			—			—			1,015
Distributions paid to noncontrolling interests	—			(750		)	—			—			—			(750		)	—			—		—			—			—			(750		)	(750		)
Balance at March 31, 2018	$	3,967,904		$	175,215		$	2,198,127		$	—		$	5,289		$	6,346,535		$	3,967,904		$	—	$	2,198,127		$	—		$	5,289		$	175,215		$	6,346,535
Net income																			72,620			—		91,417			—			69,795			853			234,685
Acquisition of 25% of Strike Force Midstream LLC																			—			—		1,068			—			—			(176,068		)	(175,000		)
Drop-Down Transaction																			(1,436,297		)	—		243,137									—			(1,193,160		)
Capital contributions																			—			—		612			—			10			—			622
Equity-based compensation plans																			140			—		—			—			—			—			140
Distributions paid to unitholders ($1.065 per common unit)																			(35,545		)	—		(85,830		)	—			(46,491		)	—			(167,866		)
Net contributions from EQT																			2,645			—		—			—			—			—			2,645
Balance at June 30, 2018																			$	2,571,467		$	—	$	2,448,531		$	—		$	28,603		$	—		$	5,048,601

																						Limited Partners
																			Predecessor Equity			Series A Preferred Units		Common Units			Class B Units			General Partner			Noncontrolling Interest			Total Equity
Balance at January 1, 2019	$	—		$	—		$	4,783,673		$	—		$	29,626		$	4,813,299		$	—		$	—	$	4,783,673		$	—		$	29,626		$	—		$	4,813,299
Net income	—			—			246,699			3,465			1,767			251,931			—			—		246,699			3,465			1,767			—			251,931
Equity-based compensation plans	—			—			255			—			—			255			—			—		255			—			—			—			255
Distributions paid to unitholders ($1.13 per common unit)	—			—			(136,117		)	—			(75,175		)	(211,292		)	—			—		(136,117		)	—			(75,175		)	—			(211,292		)
Equity restructuring associated with the EQM IDR Transaction	—			—			(42,305		)	(1,477		)	43,782			—			—			—		(42,305		)	(1,477		)	43,782			—			—
Balance at March 31, 2019	$	—		$	—		$	4,852,205		$	1,988		$	—		$	4,854,193		$	—		$	—	$	4,852,205		$	1,988		$	—		$	—		$	4,854,193
Net income																			—			22,979		125,091			4,368			—			4,033			156,471
Capital contributions																			—			—		497			—			—			—			497
Distributions paid to unitholders ($1.145 per common unit)																			—			—		(229,524		)	—			—			—			(229,524		)
Issuance of Series A Preferred Units, net of offering costs																			—			1,158,313		—			—			—			—			1,158,313
Bolt-on Acquisition																			—			—		—			—			—			486,062			486,062
Balance at June 30, 2019																			$	—		$	1,181,292	$	4,748,269		$	6,356		$	—		$	490,095		$	6,426,012



(in thousands)	Preliminary Purchase Price Allocation
Consideration given:
Cash consideration	$	861,250
Buyout of Eureka Midstream Class B Units and incentive compensation	2,530
Total consideration	863,780

Fair value of liabilities assumed:
Current liabilities	52,458
Long-term debt	300,825
Other long-term liabilities	10,203
Amount attributable to liabilities assumed	363,486

Fair value of assets acquired:
Cash	15,145
Accounts receivable	16,817
Inventory	12,991
Other current assets	882
Net property, plant and equipment	1,222,284
Intangible assets	317,000
Other assets	14,567
Amount attributable to assets acquired	1,599,686

Noncontrolling interest	(486,062		)

Goodwill	$	113,642



(in thousands)	As of June 30, 2019
Intangible assets	317,000
Less: accumulated amortization	3,375
Intangible assets, net	$	313,625



(in thousands)(unaudited)	April 10, 2019 through June 30, 2019
Operating revenues	$	28,928
Operating income attributable to EQM	$	12,496
Net income attributable to noncontrolling interests	$	4,033
Net income attributable to EQM	$	6,506



(in thousands, except per unit data)(unaudited)	Three Months Ended March 31, 2019
Pro forma operating revenues	$	421,362
Pro forma net income	$	264,215
Pro forma net income attributable to noncontrolling interests	$	3,205
Pro forma net income attributable to EQM	$	261,010
Pro forma income per unit (basic)	$	1.17
Pro forma income per unit (diluted)	$	1.12



(in thousands, except per unit data)(unaudited)	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Pro forma operating revenues	$	406,920	$	803,945
Pro forma net income	$	242,587	$	509,403
Pro forma net income attributable to noncontrolling interests	$	4,303	$	8,710
Pro forma net income attributable to EQM	$	238,284	$	500,693
Pro forma income per unit (basic)	$	1.06	$	2.24
Pro forma income per unit (diluted)	$	1.03	$	2.16


(a)	Includes the estimated fair value attributable to noncontrolling interest of $166 million.


(b)	The fair value of current assets and current liabilities were assumed to approximate their carrying values.


(c)	The identifiable intangible assets for customer relationships were estimated by applying a discounted cash flow approach which was adjusted for customer attrition assumptions and projected market conditions.


(d)	The estimated fair value of long-lived property and equipment were determined utilizing estimated replacement cost adjusted for a usage or obsolescence factor.


(e)	The estimated fair value of long-term liabilities was determined utilizing observable market inputs where available or estimated based on their then current carrying values.


(f)	Reflected the value of perceived growth opportunities, synergies and operating leverage anticipated through the acquisition and ownership of the acquired gathering assets as of November 13, 2017.


(g)	During its annual goodwill assessment for the year ended December 31, 2018, EQM determined that carrying value of the RMP PA Gas Gathering reporting unit, which comprises the Pennsylvania gathering assets acquired in the Rice Merger, was greater than its fair value. As a result, EQM recognized an impairment to goodwill of approximately $261.9 million.



	March 31, 2019
	(Thousands)
2019	$	3,702
2020	4,218
2021	4,070
2022	4,117
2023	3,841
2024	3,889
Thereafter	24,729
Total	48,566
Less: imputed interest	13,671
Present value of operating lease liability	$	34,895