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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | Revenue from Contracts with Customers As discussed in Note S, the Company adopted Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity and did not materially change the Company's amount and timing of revenues. The Company applied the ASU only to contracts that were not completed as of January 1, 2018. The Company has elected to exclude all taxes from the measurement of transaction price. For the sale of natural gas, oil and natural gas liquids (NGLs), the Company generally considers the delivery of each unit (MMBtu or Bbl) to be a separate performance obligation that is satisfied upon delivery. These contracts typically require payment within 25 days of the end of the calendar month in which the gas is delivered. A significant number of these contracts contain variable consideration because the payment terms refer to market prices at future delivery dates. In these situations, the Company has not identified a standalone selling price because the terms of the variable payments relate specifically to the Company’s efforts to satisfy the performance obligations. Other contracts contain fixed consideration (i.e. fixed price contracts or contracts with a fixed differential to New York Mercantile Exchange (NYMEX) or index prices). The fixed consideration is allocated to each performance obligation on a relative standalone selling price basis, which requires judgment from management. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price. Based on management’s judgment, the performance obligations for the sale of natural gas, oil and NGLs are satisfied at a point in time because the customer obtains control and legal title of the asset when the natural gas, oil or NGL is delivered to the designated sales point. The sales of natural gas, oil and NGLs as presented on the Statements of Consolidated Operations represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others. When selling natural gas, oil and NGLs on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis. The Company provides gathering, transmission and storage services in two manners: firm service and interruptible service. Firm service contracts are typically long term and include firm reservation fees, which are fixed, monthly charges for the guaranteed reservation of pipeline or storage capacity. Volumetric based fees under firm contracts include usage fees and charges for actual volumes transported, gathered or stored in excess of firm contracted volume. Interruptible service contracts include volumetric based fees, which are charges for the volume of gas actually gathered, transported or stored and do not guarantee access to the pipeline or storage facility. These contracts can be short or long term. Firm and interruptible contracts are billed at the end of each calendar month, with payment typically due within 21 days. Based on total projected contractual revenues and including contracts associated with expected future capacity from expansion projects that are not yet fully constructed but for which EQM has entered into firm contracts, EQM's firm gathering contracts and firm transmission and storage contracts had weighted average remaining terms of approximately 8 and 15 years, respectively, as of December 31, 2017. Under a firm contract, the Company has a stand-ready obligation to provide the service over the life of the contract. The performance obligation for firm reservation fee revenue is satisfied over time as the pipeline capacity is made available to the customer. As such, the Company recognizes firm reservation fee revenue evenly over the contract period, using a time-elapsed output method to measure progress. The performance obligation for volumetric based fees under firm and interruptible contracts is generally satisfied upon the Company's monthly billing to the customer for actual volumes gathered, transported or stored during the month. The amount billed corresponds directly to the value of the Company’s performance to date as the customer obtains value as each volume is gathered, transported or stored. Certain of EQM's gas gathering agreements are structured with minimum volume commitments (MVC), which specify minimum quantities for which a customer will be charged regardless of actual quantities gathered under the contract. Revenue is recognized for MVCs when the performance obligation has been met, which is the earlier of when the gas is gathered or when it is remote that the producer will be able to meet its MVC. Water services revenues primarily represent fees charged by EQM for the delivery of fresh water to a customer at a specified delivery point. All of EQM’s water services revenues are generated pursuant to variable price per volume contracts with customers in the Appalachian Basin. For water services contracts, the only performance obligation in each contract is for EQM to provide water (usually a minimum daily volume) to the customer at any designated delivery point. This performance obligation is generally satisfied upon EQM’s monthly billing to the customer for the volume of water provided during the month. For water services arrangements, the customer is typically invoiced on a monthly basis with payment due 21 days after the receipt of the invoice. Because the Company's performance obligations have been satisfied and an unconditional right to consideration exists as of the balance sheet date, the Company has recognized amounts due from contracts with customers of $488.7 million as accounts receivable within the Condensed Consolidated Balance Sheet. The table below provides disaggregated information regarding the Company’s revenues, presented consistently with the Company’s segment reporting. Certain contracts that provide for the release of capacity that is not used to transport the Company’s produced volumes were deemed to be outside the scope of Revenue from Contracts with Customers. The cost of, and recoveries on, that capacity are reported within pipeline and net marketing services at EQT Production. Derivative contracts are also outside the scope of Revenue from Contracts with Customers.
Three Months Ended September 30, 2018 |  | Revenues from contracts with customers |  | Other sources of revenue |  | Total
|  | (Thousands)
Natural gas sales |  | $ | 931,976 |  |  | $ | — |  |  | $ | 931,976 |
NGLs sales |  | 106,621 |  |  | — |  |  | 106,621 |
Oil sales |  | 8,392 |  |  | — |  |  | 8,392 |
Sales of natural gas, oil and NGLs |  | $ | 1,046,989 |  |  | $ | — |  |  | $ | 1,046,989 |
Pipeline and net marketing services at EQT Production |  | $ | 2,605 |  |  | $ | 3,527 |  |  | $ | 6,132 |
EQM Gathering: |  |  |  |  |  |
Firm reservation fee revenues |  | 112,598 |  |  | — |  |  | 112,598 |
Volumetric based fee revenues: |  |  |  |  |  |
Usage fees under firm contracts |  | 8,661 |  |  | — |  |  | 8,661 |
Usage fees under interruptible contracts |  | 131,602 |  |  | — |  |  | 131,602 |
EQM Transmission: |  |  |  |  |  |
Firm reservation fee revenues |  | 82,669 |  |  | — |  |  | 82,669 |
Volumetric based fee revenues: |  |  |  |  |  |
Usage fees under firm contracts |  | 5,331 |  |  | — |  |  | 5,331 |
Usage fees under interruptible contracts |  | 1,350 |  |  | — |  |  | 1,350 |
Water services at EQM Water |  | 22,373 |  |  | — |  |  | 22,373 |
Intersegment eliminations |  | (255,760 | ) |  | — |  |  | (255,760 | )
Pipeline, water and net marketing services |  | $ | 111,429 |  |  | $ | 3,527 |  |  | $ | 114,956 |
Loss on derivatives not designated as hedges |  | $ | — |  |  | $ | (3,075 | ) |  | $ | (3,075 | )
Total operating revenues |  | $ | 1,158,418 |  |  | $ | 452 |  |  | $ | 1,158,870 |
Nine Months Ended September 30, 2018 |  | Revenues from contracts with customers |  | Other sources of revenue |  | Total
|  | (Thousands)
Natural gas sales |  | $ | 2,877,660 |  |  | $ | — |  |  | $ | 2,877,660 |
NGLs sales |  | 357,746 |  |  | — |  |  | 357,746 |
Oil sales |  | 29,322 |  |  | — |  |  | 29,322 |
Sales of natural gas, oil and NGLs |  | $ | 3,264,728 |  |  | $ | — |  |  | $ | 3,264,728 |
Pipeline and net marketing services at EQT Production |  | $ | 14,273 |  |  | $ | 28,109 |  |  | $ | 42,382 |
EQM Gathering: |  |  |  |  |  |
Firm reservation fee revenues |  | 334,233 |  |  | — |  |  | 334,233 |
Volumetric based fee revenues: |  |  |  |  |  |
Usage fees under firm contracts |  | 30,725 |  |  | — |  |  | 30,725 |
Usage fees under interruptible contracts |  | 366,482 |  |  | — |  |  | 366,482 |
EQM Transmission: |  |  |  |  |  |
Firm reservation fee revenues |  | 262,666 |  |  | — |  |  | 262,666 |
Volumetric based fee revenues: |  |  |  |  |  |
Usage fees under firm contracts |  | 13,981 |  |  | — |  |  | 13,981 |
Usage fees under interruptible contracts |  | 8,782 |  |  | — |  |  | 8,782 |
Water services at EQM Water |  | 93,438 |  |  | — |  |  | 93,438 |
Intersegment eliminations |  | (775,913 | ) |  | — |  |  | (775,913 | )
Pipeline, water and net marketing services |  | $ | 348,667 |  |  | $ | 28,109 |  |  | $ | 376,776 |
Gain on derivatives not designated as hedges |  | $ | — |  |  | $ | 5,620 |  |  | $ | 5,620 |
Total operating revenues |  | $ | 3,613,395 |  |  | $ | 33,729 |  |  | $ | 3,647,124 |
The following table includes the transaction price allocated to the Company's remaining performance obligations on all contracts with fixed consideration. The table excludes all contracts that qualified for the exception to the relative standalone selling price method. Gathering firm reservation fees and transmission and storage firm reservation fees include amounts related to affiliate contracts.
| 2018 (a) | 2019 | 2020 | 2021 | 2022 | Thereafter | Total
| (Thousands)
Natural gas sales | $ | 20,173 |  | $ | 32,322 |  | $ | 1,237 |  | $ | — |  | $ | — |  | $ | — |  | $ | 53,732 |
Gathering firm reservation fees | $ | 114,771 |  | $ | 481,425 |  | $ | 557,352 |  | $ | 567,351 |  | $ | 566,062 |  | $ | 2,834,111 |  | $ | 5,121,072 |
Gathering revenues supported by MVCs | $ | — |  | $ | 65,700 |  | $ | 71,370 |  | $ | 71,175 |  | $ | 71,175 |  | $ | 136,875 |  | $ | 416,295 |
Transmission and storage firm reservation fees | $ | 94,077 |  | $ | 346,893 |  | $ | 344,328 |  | $ | 339,588 |  | $ | 334,522 |  | $ | 2,477,808 |  | $ | 3,937,216 |
(a) October 1 through December 31.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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