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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
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 NUMBER001-38629
EQUITRANS MIDSTREAM CORPORATION
(Exact name of registrant as specified in its charter) 
Pennsylvania 83-0516635
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

2200 Energy Drive, Canonsburg, Pennsylvania     15317
(Address of principal executive offices)     (Zip code)
(724) 271-7600
(Registrant's telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, no par valueETRNNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No  
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes    No  
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer                 Emerging Growth Company
Non-Accelerated FilerSmaller Reporting Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        Yes    No 
The number of shares of common stock outstanding (in thousands), as of October 31, 2021: 432,501



EQUITRANS MIDSTREAM CORPORATION
Index
 Page No.
  
  
 
   
 
   
 
   
   
 
   
 
  
  
  
  
  
 
  
2

EQUITRANS MIDSTREAM CORPORATION
Glossary of Commonly Used Terms, Abbreviations and Measurements
2021 Water Services Agreement – that certain mixed-use water services agreement entered into on October 22, 2021 (the 2021 Water Services Agreement) by the Company and EQT which replaced the Water Services Letter Agreement (as defined below) and certain other existing Pennsylvania water services agreements.
Allowance for Funds Used During Construction (AFUDC) – carrying costs for the construction of certain long-lived regulated assets are capitalized and amortized over the related assets' estimated useful lives. The capitalized amount for construction of regulated assets includes interest cost and a designated cost of equity for financing the construction of these regulated assets.
Appalachian Basin – the area of the United States composed of those portions of West Virginia, Pennsylvania, Ohio, Maryland, Kentucky and Virginia that lie in the Appalachian Mountains.
British thermal unit – a measure of the amount of energy required to raise the temperature of one pound of water one-degree Fahrenheit.
delivery point the point where gas is delivered into a downstream gathering system or transmission pipeline.
EQM – EQM Midstream Partners, LP and its subsidiaries.
EQT – EQT Corporation (NYSE: EQT) and its subsidiaries.
EQT Global GGA – that certain Gas Gathering and Compression Agreement entered into on February 26, 2020 (the EQT Global GGA Effective Date) by the Company with EQT and certain affiliates of EQT for the provision of certain gas gathering services to EQT in the Marcellus and Utica Shales of Pennsylvania and West Virginia, as subsequently amended.
firm contracts – contracts for gathering, transmission, storage and water services that reserve an agreed upon amount of pipeline or storage capacity regardless of the capacity used by the customer during each month, and generally obligate the customer to pay a fixed, monthly charge.
firm reservation fee revenues contractually obligated revenues that include fixed monthly charges under firm contracts and fixed volumetric charges under MVC (as defined below) contracts.
gas – natural gas.
minimum volume commitments (MVC or MVCs) – contracts for gathering or water services that obligate the customer to pay for a fixed amount of volumes daily, monthly, annually or over the life of the contract.
Mountain Valley Pipeline (MVP) – an estimated 300-mile, 42-inch diameter natural gas interstate pipeline with a targeted capacity of 2.0 Bcf per day that will span from the Company's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, providing access to the growing Southeast demand markets.
Mountain Valley Pipeline, LLC (MVP Joint Venture) – a joint venture among the Company and, as applicable, affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc. (Con Edison), AltaGas Ltd. and RGC Resources, Inc. that is constructing the MVP and the MVP Southgate (as defined below) projects.
MVP Southgate – a proposed 75-mile interstate pipeline that will extend from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina.
natural gas liquids (NGLs) – those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing plants. Natural gas liquids include ethane, propane, butane and iso-butane.
Preferred Interest – the preferred interest that the Company has in EQT Energy Supply, LLC (EES), a subsidiary of EQT.
throughput – the volume of natural gas transported or passing through a pipeline, plant, terminal or other facility during a particular period.
Water Services Letter Agreement – that certain letter agreement entered into on February 26, 2020 by the Company and EQT, pursuant to which EQT agreed to utilize the Company for the provision of water services in Pennsylvania under existing
3

water services agreements and new water services agreements if negotiated between the parties, which letter agreement was replaced by the 2021 Water Services Agreement.
wellhead the equipment at the surface of a well used to control the well's pressure and the point at which the hydrocarbons and water exit the ground. 
Unless the context otherwise requires, a reference to a “Note” herein refers to the accompanying Notes to Consolidated Financial Statements contained in Part I, "Item 1. Financial Statements."
AbbreviationsMeasurements
ASC – Accounting Standards Codification
Btu = one British thermal unit
ASU – Accounting Standards Update
BBtu = billion British thermal units
EPA U.S. Environmental Protection Agency
Bcf   = billion cubic feet
FASB Financial Accounting Standards Board
Mcf = thousand cubic feet
FERC – U.S. Federal Energy Regulatory Commission
MMBtu = million British thermal units
GAAP – United States Generally Accepted Accounting Principles
MMcf  = million cubic feet
NGA – Natural Gas Act of 1938
MMgal  = million gallons
NYMEX – New York Mercantile Exchange
NYSE – New York Stock Exchange

SEC – U.S. Securities and Exchange Commission
4

PART I.  FINANCIAL INFORMATION
Item 1. Financial Statements

EQUITRANS MIDSTREAM CORPORATION
 Statements of Consolidated Comprehensive Income (Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 (Thousands, except per share amounts)
Operating revenues (a)
$342,074 $350,000 $1,070,365 $1,143,703 
Operating expenses:  
Operating and maintenance 38,743 33,905 111,004 113,990 
Selling, general and administrative 33,560 31,626 104,536 94,186 
Transaction costs 984  23,797 
Depreciation66,021 66,772 203,954 191,271 
Amortization of intangible assets16,204 16,204 48,614 46,990 
Impairments of long-lived assets (b)
  56,178 55,581 
Total operating expenses154,528 149,491 524,286 525,815 
Operating income 187,546 200,509 546,079 617,888 
Equity income (c)
8,461 60,917 14,385 171,233 
Other income (d)
21,199 21,864 38,251 39,006 
Loss on extinguishment of debt (e)
  41,025 24,864 
Net interest expense (a)
94,101 86,411 284,887 219,960 
Income before income taxes123,105 196,879 272,803 583,303 
Income tax expense32,200 28,440 65,180 81,846 
Net income 90,905 168,439 207,623 501,457 
Net income attributable to noncontrolling interests3,557 3,973 10,479 210,765 
Net income attributable to Equitrans Midstream87,348 164,466 197,144 290,692 
Preferred dividends (f)
14,628 14,628 43,884 44,132 
Net income attributable to Equitrans Midstream common shareholders$72,720 $149,838 $153,260 $246,560 
Earnings per share of common stock attributable to Equitrans Midstream common shareholders - basic (g)
$0.17 $0.35 $0.35 $0.78 
Earnings per share of common stock attributable to Equitrans Midstream common shareholders - diluted (g)
$0.17 $0.35 $0.35 $0.78 
Weighted average common shares outstanding - basic433,017 432,773 433,001 314,411 
Weighted average common shares outstanding - diluted433,675 432,821 433,412 314,411 
Statement of comprehensive income:
Net income$90,905 $168,439 $207,623 $501,457 
Other comprehensive income, net of tax:
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12, $10, $36, and $30
34 30 103 90 
Other comprehensive income 34 30 103 90 
Comprehensive income 90,939 168,469 207,726 501,547 
Less: Comprehensive income attributable to noncontrolling interests3,557 3,973 10,479 210,765 
Less: Comprehensive income attributable to preferred dividends (f)
14,628 14,628 43,884 44,132 
Comprehensive income attributable to Equitrans Midstream common shareholders$72,754 $149,868 $153,363 $246,650 
Dividends declared per common share$0.15 $0.15 $0.45 $0.45 
5



(a)Includes related party activity with EQT Corporation (EQT). See Note 6.
(b)See Note 3 for disclosure regarding impairments of long-lived assets.
(c)Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note 7.
(d)See Note 9 for disclosures regarding derivative instruments.
(e)See Note 8 for disclosure regarding loss on extinguishment of debt.
(f)See Note 2 for disclosure regarding the Equitrans Midstream Preferred Shares (as defined in Note 2).
(g)See Note 10 for disclosure regarding the Company's calculation of net income per share of common stock (basic and diluted).

The accompanying notes are an integral part of these consolidated financial statements.
6

EQUITRANS MIDSTREAM CORPORATION
Statements of Consolidated Cash Flows (Unaudited)
 Nine Months Ended September 30,
 20212020
 (Thousands)
Cash flows from operating activities:  
Net income$207,623 $501,457 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 203,954 191,271 
Amortization of intangible assets48,614 46,990 
Deferred income taxes61,267 79,415 
Impairments of long-lived assets56,178 55,581 
Equity income (14,385)(171,233)
Other income(38,160)(38,403)
Loss on extinguishment of debt41,025 24,864 
Non-cash long-term compensation expense10,590 9,388 
Changes in other assets and liabilities:
Accounts receivable73,348 (11,021)
Accounts payable(1,765)3,151 
Accrued interest(48,893)(5,592)
Deferred revenue225,315 148,770 
Other assets and other liabilities(2,687)(10,443)
Net cash provided by operating activities822,024 824,195 
Cash flows from investing activities:  
Capital expenditures(211,072)(377,592)
Capital contributions to the MVP Joint Venture(178,953)(144,264)
Principal payments received on the Preferred Interest (as defined in Note 6)3,885 3,726 
Net cash used in investing activities(386,140)(518,130)
Cash flows from financing activities:  
Proceeds from revolving credit facility borrowings457,500 1,965,000 
Payments on revolving credit facility borrowings(600,000)(2,080,000)
Proceeds from the issuance of long-term debt1,900,000 1,600,000 
Debt discounts, debt issuance costs and credit facility arrangement fees(29,904)(26,720)
Payment for retirement of long-term debt(1,936,250)(594,000)
Redemption of EQM Series A Preferred Units (as defined in Note 2) (617,338)
Distributions paid to noncontrolling interest EQM unitholders (128,770)
Distributions paid to holders of EQM Series A Preferred Units (61,931)
Dividends paid to holders of Equitrans Midstream Preferred Shares(43,884)(2,251)
Dividends paid to common shareholders(194,624)(213,524)
Cash Shares and Cash Amount (as defined in Note 5) (52,323)
Distributions to Eureka Midstream Holdings, LLC non-controlling member(2,500) 
Net cash used in financing activities(449,662)(211,857)
Net change in cash and cash equivalents(13,778)94,208 
Cash and cash equivalents at beginning of period208,023 88,322 
Cash and cash equivalents at end of period$194,245 $182,530 
Cash paid during the period for:  
Interest, net of amount capitalized$326,456 $221,918 
Non-cash activity during the period for:
  
Issuance of Equitrans Midstream common stock pursuant to the EQM Merger (as defined in Note 2), net of tax$ $2,736,229 
Issuance of Equitrans Midstream Preferred Shares pursuant to the Restructuring Agreement (as defined in Note 2) 667,214 
Contract liability 121,483 
The accompanying notes are an integral part of these consolidated financial statements.
7

EQUITRANS MIDSTREAM CORPORATION
Consolidated Balance Sheets (Unaudited) 
September 30, 2021December 31, 2020
(Thousands)
ASSETS
Current assets:  
Cash and cash equivalents$194,245 $208,023 
Accounts receivable (net of allowance for credit losses of $2,868 and $4,699 as of September 30, 2021 and December 31, 2020, respectively) (a)
238,542 290,446 
Other current assets (a)
53,047 63,268 
Total current assets
485,834 561,737 
Property, plant and equipment8,929,199 8,835,652 
Less: accumulated depreciation(1,155,982)(1,007,756)
Net property, plant and equipment7,773,217 7,827,896 
Investment in unconsolidated entity3,089,091 2,796,316 
Goodwill486,698 486,698 
Net intangible assets667,976 716,590 
Other assets (a)
365,586 336,615 
Total assets$12,868,402 $12,725,852 
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY  
Current liabilities:  
Current portion of revolving credit facility borrowings (b)
$ $302,500 
Accounts payable64,226 72,098 
Capital contributions payable to the MVP Joint Venture108,231 10,723 
Accrued interest77,298 126,191 
Accrued liabilities68,484 83,366 
Total current liabilities318,239 594,878 
Long-term liabilities:
   Revolving credit facility borrowings (c)
645,000 485,000 
   Long-term debt6,432,186 6,443,312 
   Contract liability (a)(d)
622,992 398,750 
   Deferred income tax liability410,128 345,896 
   Regulatory and other long-term liabilities98,870 94,902 
Total liabilities8,527,415 8,362,738 
Mezzanine equity:
Equitrans Midstream Preferred Shares, 30,018 shares issued and outstanding as of September 30, 2021 and December 31, 2020 (e)
681,842 681,842 
Shareholders' equity:  
Common stock, no par value, 432,522 and 432,470 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
3,952,896 3,941,295 
Retained deficit(770,769)(728,959)
Accumulated other comprehensive loss(2,126)(2,229)
Total common shareholders' equity3,180,001 3,210,107 
Noncontrolling interests479,144 471,165 
Total shareholders' equity3,659,145 3,681,272 
Total liabilities, mezzanine equity and shareholders' equity$12,868,402 $12,725,852 
(a)Includes related party activity with EQT. See Note 6.
(b)Includes aggregate borrowings outstanding on the Former Eureka Credit Facility (as defined in Note 8) as of December 31, 2020. See Note 8 for further detail.
(c)Includes aggregate borrowings outstanding on the Amended EQM Credit Facility (as defined in Note 8) as of September 30, 2021 and on the First Amended EQM Credit Facility (as defined in Note 8) as of December 31, 2020 and aggregate borrowings outstanding on the 2021 Eureka Credit Facility (as defined in Note 8) as of September 30, 2021. See Note 8 for further detail.
(d)See Note 5 for disclosure regarding the Company's contract liabilities.
(e)See Note 2 for disclosures regarding the Equitrans Midstream Preferred Shares.
The accompanying notes are an integral part of these consolidated financial statements.
8

EQUITRANS MIDSTREAM CORPORATION
Statements of Consolidated Shareholders' Equity and Mezzanine Equity (Unaudited)
Mezzanine
Common StockEquity
AccumulatedEquitrans
OtherMidstream
 SharesNoRetainedComprehensiveNoncontrollingTotalPreferred
 OutstandingPar ValueDeficitLossInterests EquityShares
 (Thousands, except per share and unit amounts)
Balance at January 1, 2020254,745 $1,292,804 $(618,062)$(2,026)$4,609,364 $5,282,080 $ 
Other comprehensive income (net of tax):
Net income— — 69,732 — 119,828 189,560 — 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $10
— —  30 — 30 — 
Dividends on common shares ($0.45 per share)
(178)— (115,400)— — (115,400)— 
Share-based compensation plans85 4,500 — — 285 4,785 — 
Distributions paid to noncontrolling interest unitholders ($1.16 per common unit for EQM)
— — — — (96,526)(96,526)— 
Distributions paid to holders of EQM Series A Preferred Units ($1.0364 per EQM Series A Preferred Unit)
— — — — (25,501)(25,501)— 
Share Purchase Agreements (as defined in Note 5)(25,300)— (190,992)— — (190,992)— 
Adoption of Topic 326— — (3,718)— — (3,718)— 
Balance at March 31, 2020229,352 $1,297,304 $(858,440)$(1,996)$4,607,450 $5,044,318 $ 
Other comprehensive income (net of tax):
Net income— — 54,243 — 86,964 141,207 2,251 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $10
— — — 30 — 30 — 
Dividends on common shares ($0.15 per share)
— — (34,634)— — (34,634)— 
Share-based compensation plans(20)1,856 — — — 1,856 — 
Distributions paid to noncontrolling interest unitholders ($0.3875 per common unit for EQM)
— — — — (32,244)(32,244)— 
Distributions paid to holders of EQM Series A Preferred Units ($1.0364 per EQM Series A Preferred Unit)
— — — — (25,501)(25,501)— 
Partial period distributions on EQM Series A Preferred Units converted in the EQM Merger— — — — (10,929)(10,929)— 
Redemption of EQM Series A Preferred Units— — (27,253)— (590,085)(617,338)— 
Restructuring Agreement— (82,717)— — (579,157)(661,874)667,214 
EQM Merger203,137 2,736,229 — — (2,993,453)(257,224)
Balance at June 30, 2020432,469 $3,952,672 $(866,084)$(1,966)$463,045 $3,547,667 $669,465 
Other comprehensive income (net of tax):
Net income — — 149,838 — 3,973 153,811 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $10
— — — 30 — 30 — 
Dividends on common shares ($0.15 per share)
— — (65,117)— — (65,117)— 
Share-based compensation plans1 3,262 — — — 3,262 — 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.075 per share)
— — — — — — (2,251)
Balance at September 30, 2020432,470 $3,955,934 $(781,363)$(1,936)$467,018 $3,639,653 $681,842 
9


Mezzanine
Equity
Common Stock
AccumulatedEquitrans
OtherMidstream
SharesNoRetainedComprehensiveNoncontrollingTotalPreferred
OutstandingPar ValueDeficitLossInterests EquityShares
(Thousands, except per share amounts)
Balance at January 1, 2021432,470 $3,941,295 $(728,959)$(2,229)$471,165 $3,681,272 $681,842 
Other comprehensive income (net of tax):
Net income— — 58,055 — 3,914 61,969 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12
— — — 34 — 34 — 
Dividends on common shares ($0.15 per share)
— — (64,984)— — (64,984)— 
Share-based compensation plans, net28 4,662 — — — 4,662 — 
Distributions paid to noncontrolling interest in Eureka Midstream Holdings, LLC— — — — (2,500)(2,500)— 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)
— — — — — — (14,628)
Balance at March 31, 2021432,498 $3,945,957 $(735,888)$(2,195)$472,579 $3,680,453 $681,842 
Other comprehensive income (net of tax):
Net income— — 22,485 — 3,008 25,493 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12
— — — 35 — 35 — 
Dividends on common shares ($0.15 per share)
— — (64,750)— — (64,750)— 
Share-based compensation plans, net7 3,635 — — — 3,635 — 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)
— — — — — — (14,628)
Balance at June 30, 2021432,505 $3,949,592 $(778,153)$(2,160)$475,587 $3,644,866 $681,842 
Other comprehensive income (net of tax):
Net income— — 72,720 — 3,557 76,277 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12
— — — 34 — 34 — 
Dividends on common shares ($0.15 per share)
— — (65,336)— — (65,336)— 
Share-based compensation plans17 3,304 — — — 3,304 — 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)
— — — — — — (14,628)
Balance at September 30, 2021432,522 $3,952,896 $(770,769)$(2,126)$479,144 $3,659,145 $681,842 
The accompanying notes are an integral part of these consolidated financial statements.
10

EQUITRANS MIDSTREAM CORPORATION
Notes to Consolidated Financial Statements (Unaudited)
1.    Financial Statements
Nature of Business. The Company provides midstream services to its customers in Pennsylvania, West Virginia and Ohio through its three primary assets: the gathering system, which includes predominantly dry gas gathering systems of high-pressure gathering lines; the transmission system, which includes FERC-regulated interstate pipelines and storage systems; and the water network, which consists of water pipelines, impoundment facilities, above ground storage facilities, pumping stations, take point facilities and measurement facilities that provide water delivery, gathering and storage services that support well completion activities and produced water flowback for recycling.
Basis of Presentation. References in these financial statements to Equitrans Midstream or the Company refer collectively to Equitrans Midstream Corporation and its consolidated subsidiaries for all periods presented, unless otherwise indicated.
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal, recurring adjustments, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of the Company as of September 30, 2021, the results of its operations and equity for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020. The consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but it does not include all of the information and notes required by GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which includes all disclosures required by GAAP.

Due to, among other things, the seasonal nature of the Company's utility customer contracts, as well as producers’ well completion activities and varying needs for fresh and produced water (which are partially driven by horizontal lateral lengths and the number of completion stages per well), the interim statements for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

For further information, refer to the Company's annual consolidated financial statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, as well as Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein.

The consolidated financial statements as of and for the three and nine months ended September 30, 2021 and 2020, and the consolidated balance sheet at December 31, 2020, reflect the closing of the EQM Merger and the Restructuring (each as defined in Note 2). See Note 2 for further information.
Recently Issued Accounting Standards.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Amended EQM Credit Facility and the 2021 Eureka Credit Facility (each as defined in Note 8), as well as for each dividend following March 31, 2024 for the Equitrans Midstream Preferred Shares, which each use the London Inter-Bank Offered Rate (LIBOR) as a reference rate. The ASU was effective immediately but is only available through December 31, 2022. The Company is currently evaluating the potential impact of this standard on its financial statements.
In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments will be effective for fiscal years beginning after December 15, 2021. Early adoption is permitted for fiscal years beginning after December 15, 2020. Adoption of the guidance must commence at the beginning of the annual fiscal year. The Company is currently evaluating the potential impact of this standard on its financial statements.
11


2.    Investments in Consolidated, Non-Wholly Owned Entities
EQM Merger. On June 17, 2020, pursuant to that certain Agreement and Plan of Merger, dated as of February 26, 2020, by and among the Company, EQM LP Corporation, a wholly owned subsidiary of the Company (EQM LP), LS Merger Sub, LLC, a wholly owned subsidiary of EQM LP (Merger Sub), EQM and EQGP Services, LLC, the general partner of EQM (the EQM General Partner), Merger Sub merged with and into EQM (the EQM Merger), with EQM continuing and surviving as an indirect, wholly owned subsidiary of the Company. Upon consummation of the EQM Merger, the Company acquired all of the outstanding EQM common units representing limited partner interests in EQM (EQM common units) that the Company and its subsidiaries did not already own. Following the closing of the EQM Merger, EQM was no longer a publicly traded entity.
At the effective time of the EQM Merger (the Effective Time), subject to applicable tax withholding, (i) each outstanding EQM common unit, other than EQM common units owned by the Company and its subsidiaries, was converted into the right to receive 2.44 shares of Equitrans Midstream common stock (the Merger Consideration); (ii) (x) $600.0 million aggregate principal amount of the Series A Perpetual Convertible Preferred Units representing limited partner interests in EQM (such units, EQM Series A Preferred Units) issued and outstanding immediately prior to the Effective Time were redeemed by EQM for cash at 101% of the EQM Series A Preferred Unit purchase price of $48.77 per such unit (the EQM Series A Preferred Unit Purchase Price) plus any accrued and unpaid distribution amounts and partial period distribution amounts, and (y) immediately following such redemption, each remaining issued and outstanding EQM Series A Preferred Unit was exchanged for