Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - EQT Corp | a2237122zex-99_2.htm |
| EX-10.2 - EX-10.2 - EQT Corp | a2237122zex-10_2.htm |
| EX-10.1 - EX-10.1 - EQT Corp | a2237122zex-10_1.htm |
| EX-4.1 - EX-4.1 - EQT Corp | a2237122zex-4_1.htm |
| EX-2.4 - EX-2.4 - EQT Corp | a2237122zex-2_4.htm |
| EX-2.3 - EX-2.3 - EQT Corp | a2237122zex-2_3.htm |
| EX-2.2 - EX-2.2 - EQT Corp | a2237122zex-2_2.htm |
| EX-2.1 - EX-2.1 - EQT Corp | a2237122zex-2_1.htm |
| 8-K - 8-K - EQT Corp | a2237122z8-k.htm |
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Introduction
On November 12, 2018, EQT Corporation (the Company or EQT) completed the previously-announced separation (the Separation) of its midstream business, consisting of its separately managed gathering, transmission and storage, and water services operations (Midstream Business) into a separate publicly traded company, Equitrans Midstream Corporation (Equitrans Midstream). Following the Separation, EQT retained its upstream business, consisting of its natural gas, oil and natural gas liquids development, production and sales and commercial operations (Upstream Business).
The Company completed the Separation by means of a pro rata distribution of 80.1% of the outstanding shares of Equitrans Midstream common stock to the Company’s shareholders (the Distribution). The Company’s shareholders of record as of the close of business on November 1, 2018 (the Record Date) were entitled to receive 0.80 shares of Equitrans Midstream common stock for every one share of the Company’s common stock held as of the close of business on the Record Date. The Company retained 19.9% of the outstanding common stock of Equitrans Midstream.
The Company’s common stock is listed under the symbol “EQT” on the New York Stock Exchange (NYSE). Equitrans Midstream is listed under the symbol “ETRN” on the NYSE.
In connection with the Separation, a series of internal reorganization transactions were undertaken to transfer the assets and liabilities of the Midstream Business to Equitrans Midstream.
Basis of Presentation
The following Unaudited Pro Forma Condensed Consolidated Financial Statements of EQT are presented to illustrate the estimated effects of the Separation and Distribution on the historical combined company, and have been derived from the historical consolidated financial statements of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The following Unaudited Pro Forma Condensed Consolidated Statements Operations for the nine months ended September 30, 2018 and for each of the three years in the period ended December 31, 2017, assume that the Separation and Distribution occurred on January 1, 2015. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2018 assumes that the Separation and Distribution occurred on that date.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared using certain assumptions, as described in the accompanying notes, which management believes are reasonable based on the information currently available. The Unaudited Pro Forma Condensed Consolidated Financial Statements give effect to the following:
· the contribution by the Company to Equitrans Midstream, pursuant to the Separation, all of the assets and liabilities that comprised the Midstream Business of the historical combined company;
· the retention by EQT of 19.9% ownership of Equitrans Midstream’s outstanding common stock;
· non-recurring costs incurred in connection with the Separation, as appropriate; and
· the impact of the Separation and Distribution Agreement, Tax Matters Agreement, Transition Services Agreement, Employee Matters Agreement and other agreements entered into by EQT and Equitrans Midstream (or their respective affiliates) in connection with the Separation, and the provisions contained therein.
The Company believes that the adjustments included within the “Separation of Equitrans Midstream” column of the Unaudited Pro Forma Condensed Consolidated Financial Statements are consistent with the guidance for discontinued operations under GAAP. The Company’s current estimates on a discontinued operations basis are preliminary and could change
as the Company finalizes discontinued operations accounting to be reported in the Company’s Annual Report on Form 10-K for the year ending December 31, 2018.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements are provided for illustrative and information purposes only and are not necessarily indicative of what EQT’s results of operations or financial condition would have been had the Separation and Distribution been completed on the dates assumed. In addition, they are not necessarily indicative of EQT’s future results of operations or financial condition. Beginning on November 13, 2018, Equitrans Midstream’s historical financial results for periods prior to the Separation will be reflected in EQT’s consolidated financial statements as discontinued operations.
The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes and the Company’s historical Management’s Discussion and Analysis of Financial Condition and Results of Operations which are available at the Securities and Exchange Commission’s website at www.sec.gov and EQT’s web site at www.eqt.com.
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2018
|
(in thousands) |
|
Historical |
|
Separation of |
|
Other Pro |
|
Notes |
|
Pro Forma |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
4,855 |
|
$ |
(1,504 |
) |
$ |
— |
|
|
|
$ |
3,351 |
|
|
Accounts receivable, net |
|
882,386 |
|
(18,631 |
) |
— |
|
|
|
863,755 |
| ||||
|
Derivative instruments, at fair value |
|
315,564 |
|
— |
|
— |
|
|
|
315,564 |
| ||||
|
Prepaid expenses and other |
|
31,853 |
|
(5,722 |
) |
— |
|
|
|
26,131 |
| ||||
|
Total current assets |
|
1,234,658 |
|
(25,857 |
) |
— |
|
|
|
1,208,801 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Property, plant and equipment |
|
28,022,769 |
|
(6,211,158 |
) |
— |
|
|
|
21,811,611 |
| ||||
|
Less: accumulated depreciation and depletion |
|
(4,892,875 |
) |
561,003 |
|
— |
|
|
|
(4,331,872 |
) | ||||
|
Net property, plant and equipment |
|
23,129,894 |
|
(5,650,155 |
) |
— |
|
|
|
17,479,739 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Intangible assets, net |
|
674,175 |
|
(586,500 |
) |
— |
|
|
|
87,675 |
| ||||
|
Goodwill |
|
1,998,726 |
|
(1,527,877 |
) |
— |
|
|
|
470,849 |
| ||||
|
Investment in nonconsolidated entity |
|
1,300,430 |
|
(1,300,430 |
) |
— |
|
|
|
— |
| ||||
|
Investment in Equitrans Midstream |
|
— |
|
— |
|
1,111,830 |
|
(b) |
|
1,111,830 |
| ||||
|
Other assets |
|
323,446 |
|
(45,822 |
) |
— |
|
|
|
277,624 |
| ||||
|
Total assets |
|
$ |
28,661,329 |
|
$ |
(9,136,641 |
) |
$ |
1,111,830 |
|
|
|
$ |
20,636,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current portion of Senior Notes |
|
$ |
699,527 |
|
$ |
— |
|
$ |
— |
|
|
|
$ |
699,527 |
|
|
Accounts payable |
|
978,757 |
|
33,912 |
|
— |
|
|
|
1,012,669 |
| ||||
|
Derivative instruments, at fair value |
|
183,677 |
|
— |
|
— |
|
|
|
183,677 |
| ||||
|
Other current liabilities |
|
784,115 |
|
(526,451 |
) |
3,564 |
|
(c) |
|
261,228 |
| ||||
|
Total current liabilities |
|
2,646,076 |
|
(492,539 |
) |
3,564 |
|
|
|
2,157,101 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Credit facility borrowings |
|
472,000 |
|
(22,000 |
) |
— |
|
|
|
450,000 |
| ||||
|
Note payable to Equitrans Midstream |
|
— |
|
111,249 |
|
— |
|
|
|
111,249 |
| ||||
|
Senior Notes |
|
7,336,570 |
|
(3,455,296 |
) |
— |
|
|
|
3,881,274 |
| ||||
|
Deferred income taxes |
|
1,212,867 |
|
340,847 |
|
— |
|
|
|
1,553,714 |
| ||||
|
Other liabilities and credits |
|
776,424 |
|
(31,819 |
) |
— |
|
|
|
744,605 |
| ||||
|
Total liabilities |
|
12,443,937 |
|
(3,549,558 |
) |
3,564 |
|
|
|
8,897,943 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total EQT shareholders’ equity |
|
11,000,175 |
|
(369,866 |
) |
1,108,266 |
|
|
|
11,738,575 |
| ||||
|
Noncontrolling interests in consolidated subsidiaries |
|
5,217,217 |
|
(5,217,217 |
) |
— |
|
|
|
— |
| ||||
|
Total equity |
|
16,217,392 |
|
(5,587,083 |
) |
1,108,266 |
|
|
|
11,738,575 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total liabilities and equity |
|
$ |
28,661,329 |
|
$ |
(9,136,641 |
) |
$ |
1,111,830 |
|
|
|
$ |
20,636,518 |
|
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2018
|
(in thousands, except per share amounts) |
|
Historical |
|
Separation of |
|
Pro Forma |
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Sales of natural gas, oil and NGLs |
|
$ |
3,264,728 |
|
$ |
— |
|
$ |
3,264,728 |
|
|
Pipeline, water and net marketing services |
|
376,776 |
|
(334,394 |
) |
42,382 |
| |||
|
Gain on derivatives not designated as hedges |
|
5,620 |
|
— |
|
5,620 |
| |||
|
Total operating revenues |
|
3,647,124 |
|
(334,394 |
) |
3,312,730 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Transportation and processing |
|
576,597 |
|
688,876 |
|
1,265,473 |
| |||
|
Operation and maintenance |
|
82,218 |
|
(82,218 |
) |
— |
| |||
|
Production |
|
149,471 |
|
(240 |
) |
149,231 |
| |||
|
Exploration |
|
42,058 |
|
— |
|
42,058 |
| |||
|
Selling, general and administrative |
|
195,828 |
|
(58,278 |
) |
137,550 |
| |||
|
Depreciation and depletion |
|
1,290,876 |
|
(138,458 |
) |
1,152,418 |
| |||
|
Impairment/loss on sale of long-lived assets |
|
2,706,438 |
|
— |
|
2,706,438 |
| |||
|
Transaction costs |
|
93,176 |
|
(69,219 |
) |
23,957 |
| |||
|
Amortization of intangible assets |
|
62,185 |
|
(31,160 |
) |
31,025 |
| |||
|
Total operating expenses |
|
5,198,847 |
|
309,303 |
|
5,508,150 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income (loss) |
|
(1,551,723 |
) |
(643,697 |
) |
(2,195,420 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Other income |
|
43,092 |
|
(39,029 |
) |
4,063 |
| |||
|
Interest expense |
|
240,059 |
|
(68,848 |
) |
171,211 |
| |||
|
Income (loss) before income taxes |
|
(1,748,690 |
) |
(613,878 |
) |
(2,362,568 |
) | |||
|
Income tax (benefit) expense |
|
(503,505 |
) |
(93,218 |
) |
(596,723 |
) | |||
|
Net income (loss) |
|
(1,245,185 |
) |
(520,660 |
) |
(1,765,845 |
) | |||
|
Less: Net income attributable to noncontrolling interests |
|
362,696 |
|
(362,696 |
) |
— |
| |||
|
Net income (loss) attributable to EQT Corporation |
|
$ |
(1,607,881 |
) |
$ |
(157,964 |
) |
$ |
(1,765,845 |
) |
|
|
|
|
|
|
|
|
| |||
|
Earnings per share of common stock attributable to EQT Corporation: |
|
|
|
|
|
|
| |||
|
Basic: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
262,816 |
|
|
|
262,816 |
| |||
|
Net income (loss) |
|
$ |
(6.12 |
) |
|
|
$ |
(6.72 |
) | |
|
Diluted: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
262,816 |
|
|
|
262,816 |
| |||
|
Net income (loss) |
|
$ |
(6.12 |
) |
|
|
$ |
(6.72 |
) | |
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2017
|
(in thousands, except per share amounts) |
|
Historical |
|
Separation of |
|
Pro Forma |
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Sales of natural gas, oil and NGLs |
|
$ |
2,651,318 |
|
$ |
— |
|
$ |
2,651,318 |
|
|
Pipeline, water and net marketing services |
|
329,103 |
|
(279,422 |
) |
49,681 |
| |||
|
Gain on derivatives not designated as hedges |
|
390,021 |
|
— |
|
390,021 |
| |||
|
Total operating revenues |
|
3,370,442 |
|
(279,422 |
) |
3,091,020 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Transportation and processing |
|
559,839 |
|
604,944 |
|
1,164,783 |
| |||
|
Operation and maintenance |
|
80,833 |
|
(80,833 |
) |
— |
| |||
|
Production |
|
182,268 |
|
(919 |
) |
181,349 |
| |||
|
Exploration |
|
25,117 |
|
— |
|
25,117 |
| |||
|
Selling, general and administrative |
|
262,261 |
|
(53,275 |
) |
208,986 |
| |||
|
Depreciation and depletion |
|
1,077,559 |
|
(106,574 |
) |
970,985 |
| |||
|
Acquisition costs |
|
237,312 |
|
(85,124 |
) |
152,188 |
| |||
|
Amortization of intangible assets |
|
10,940 |
|
(5,540 |
) |
5,400 |
| |||
|
Total operating expenses |
|
2,436,129 |
|
272,679 |
|
2,708,808 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income (loss) |
|
934,313 |
|
(552,101 |
) |
382,212 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Other income (expense) |
|
23,623 |
|
(26,610 |
) |
(2,987 |
) | |||
|
Loss on debt extinguishment |
|
12,641 |
|
— |
|
12,641 |
| |||
|
Interest expense |
|
202,772 |
|
(34,801 |
) |
167,971 |
| |||
|
Income (loss) before income taxes |
|
742,523 |
|
(543,910 |
) |
198,613 |
| |||
|
Income tax (benefit) expense |
|
(1,115,619 |
) |
(72,797 |
) |
(1,188,416 |
) | |||
|
Net income (loss) |
|
1,858,142 |
|
(471,113 |
) |
1,387,029 |
| |||
|
Less: Net income attributable to noncontrolling interests |
|
349,613 |
|
(349,613 |
) |
— |
| |||
|
Net income (loss) attributable to EQT Corporation |
|
$ |
1,508,529 |
|
$ |
(121,500 |
) |
$ |
1,387,029 |
|
|
|
|
|
|
|
|
|
| |||
|
Earnings per share of common stock attributable to EQT Corporation: |
|
|
|
|
|
|
| |||
|
Basic: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
187,380 |
|
|
|
187,380 |
| |||
|
Net income (loss) |
|
$ |
8.05 |
|
|
|
$ |
7.40 |
| |
|
Diluted: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
187,727 |
|
|
|
187,727 |
| |||
|
Net income (loss) |
|
$ |
8.04 |
|
|
|
$ |
7.39 |
| |
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2016
|
(in thousands, except per share amounts) |
|
Historical |
|
Separation of |
|
Pro Forma |
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Sales of natural gas, oil and NGLs |
|
$ |
1,594,997 |
|
$ |
— |
|
$ |
1,594,997 |
|
|
Pipeline, water and net marketing services |
|
259,000 |
|
(217,952 |
) |
41,048 |
| |||
|
Loss on derivatives not designated as hedges |
|
(248,991 |
) |
— |
|
(248,991 |
) | |||
|
Total operating revenues |
|
1,605,006 |
|
(217,952 |
) |
1,387,054 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Transportation and processing |
|
365,817 |
|
514,373 |
|
880,190 |
| |||
|
Operation and maintenance |
|
69,308 |
|
(69,308 |
) |
— |
| |||
|
Production |
|
174,170 |
|
— |
|
174,170 |
| |||
|
Exploration |
|
13,410 |
|
— |
|
13,410 |
| |||
|
Selling, general and administrative |
|
262,969 |
|
(44,022 |
) |
218,947 |
| |||
|
Depreciation and depletion |
|
927,920 |
|
(71,469 |
) |
856,451 |
| |||
|
Impairment/loss on sale of long-lived assets |
|
66,687 |
|
(59,748 |
) |
6,939 |
| |||
|
Total operating expenses |
|
1,880,281 |
|
269,826 |
|
2,150,107 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Gain on sale / exchange of assets |
|
8,025 |
|
— |
|
8,025 |
| |||
|
Operating (loss) income |
|
(267,250 |
) |
(487,778 |
) |
(755,028 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Other income (expense) |
|
20,643 |
|
(28,718 |
) |
(8,075 |
) | |||
|
Interest expense |
|
147,920 |
|
(16,761 |
) |
131,159 |
| |||
|
(Loss) income before income taxes |
|
(394,527 |
) |
(499,735 |
) |
(894,262 |
) | |||
|
Income tax (benefit) expense |
|
(263,464 |
) |
(99,305 |
) |
(362,769 |
) | |||
|
Net (loss) income |
|
(131,063 |
) |
(400,430 |
) |
(531,493 |
) | |||
|
Less: Net income attributable to noncontrolling interests |
|
321,920 |
|
(321,920 |
) |
— |
| |||
|
Net (loss) income attributable to EQT Corporation |
|
$ |
(452,983 |
) |
$ |
(78,510 |
) |
$ |
(531,493 |
) |
|
|
|
|
|
|
|
|
| |||
|
Earnings per share of common stock attributable to EQT Corporation: |
|
|
|
|
|
|
| |||
|
Basic: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
166,978 |
|
|
|
166,978 |
| |||
|
Net (loss) income |
|
$ |
(2.71 |
) |
|
|
$ |
(3.18 |
) | |
|
Diluted: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
166,978 |
|
|
|
166,978 |
| |||
|
Net (loss) income |
|
$ |
(2.71 |
) |
|
|
$ |
(3.18 |
) | |
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
EQT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2015
|
(in thousands, except per share amounts) |
|
Historical |
|
Separation of |
|
Pro Forma |
| |||
|
Revenues: |
|
|
|
|
|
|
| |||
|
Sales of natural gas, oil and NGLs |
|
$ |
1,690,360 |
|
$ |
— |
|
$ |
1,690,360 |
|
|
Pipeline, water and net marketing services |
|
263,640 |
|
(208,098 |
) |
55,542 |
| |||
|
Gain on derivatives not designated as hedges |
|
385,762 |
|
— |
|
385,762 |
| |||
|
Total operating revenues |
|
2,339,762 |
|
(208,098 |
) |
2,131,664 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Transportation and processing |
|
275,348 |
|
423,910 |
|
699,258 |
| |||
|
Operation and maintenance |
|
69,135 |
|
(69,135 |
) |
— |
| |||
|
Production |
|
176,977 |
|
— |
|
176,977 |
| |||
|
Exploration |
|
61,970 |
|
— |
|
61,970 |
| |||
|
Selling, general and administrative |
|
249,548 |
|
(40,552 |
) |
208,996 |
| |||
|
Depreciation and depletion |
|
819,216 |
|
(57,066 |
) |
762,150 |
| |||
|
Impairment/loss on sale of long-lived assets |
|
122,469 |
|
— |
|
122,469 |
| |||
|
Total operating expenses |
|
1,774,663 |
|
257,157 |
|
2,031,820 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income (loss) |
|
565,099 |
|
(465,255 |
) |
99,844 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Other income |
|
7,993 |
|
(7,773 |
) |
220 |
| |||
|
Interest expense |
|
146,531 |
|
(21,348 |
) |
125,183 |
| |||
|
Income (loss) before income taxes |
|
426,561 |
|
(451,680 |
) |
(25,119 |
) | |||
|
Income tax expense (benefit) |
|
104,675 |
|
(42,520 |
) |
62,155 |
| |||
|
Net income (loss) |
|
321,886 |
|
(409,160 |
) |
(87,274 |
) | |||
|
Less: Net income attributable to noncontrolling interests |
|
236,715 |
|
(236,715 |
) |
— |
| |||
|
Net income (loss) attributable to EQT Corporation |
|
$ |
85,171 |
|
$ |
(172,445 |
) |
$ |
(87,274 |
) |
|
|
|
|
|
|
|
|
| |||
|
Earnings per share of common stock attributable to EQT Corporation: |
|
|
|
|
|
|
| |||
|
Basic: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
152,398 |
|
|
|
152,398 |
| |||
|
Net income (loss) |
|
$ |
0.56 |
|
|
|
$ |
(0.57 |
) | |
|
Diluted: |
|
|
|
|
|
|
| |||
|
Weighted average common stock outstanding |
|
152,939 |
|
|
|
152,398 |
| |||
|
Net income (loss) |
|
$ |
0.56 |
|
|
|
$ |
(0.57 |
) | |
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Pro Forma Adjustments and Assumptions
The adjustments are based on currently available information and certain estimates and assumptions. The actual effects of these transactions will differ from the pro forma adjustments. A general description of the adjustments is provided as follows:
(a) Reflects the revenues, expenses, assets, liabilities and equity attributable to Equitrans Midstream which were included in the Company’s historical financial statements. Corporate expenses that were not specifically related to Equitrans Midstream have been excluded, as such general corporate expenses do not meet the requirements to be presented in discontinued operations. Adjustments to deferred income taxes represent the tax effect of temporary difference between the tax basis of assets and liabilities to be transferred to Equitrans Midstream. The income tax provision attributable to Equitrans Midstream was based on the estimated federal and state statutory rates of 23.16%, 37.38%, 37.61% and 36.75% for the nine months ended September 31, 2018 and the years ended December 31, 2017, 2016 and 2015, respectively, adjusted for the impact of noncontrolling interests. The Company’s effective tax rate in future years may vary significantly from these estimated statutory rates.
(b) Reflects the retention by EQT of 19.9% of the outstanding common stock of Equitrans Midstream, recorded at 19.9% of the net book value of Equitrans Midstream as of the date of the Separation.
(c) Subsequent to September 30, 2018, EQT incurred additional one-time separation costs of approximately $3.6 million through the date of the Separation. These costs primarily related to non-recurring professional fees associated with regulatory filings and separation activities within finance, legal and information systems functions.