eqt-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

☐

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: 001-03551

EQT CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania						25-0464690
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania						15222
(Address of principal executive offices)						(Zip Code)

(412) 553-5700

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, no par value

EQT

New 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 filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth 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 ☒

As of April 22, 2022, 369,535,705 shares of common stock, no par value, of the registrant were outstanding.

Table of Contents

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Statements of Condensed Consolidated Operations	3
	Statements of Condensed Consolidated Comprehensive Loss	4
	Condensed Consolidated Balance Sheets	5
	Statements of Condensed Consolidated Cash Flows	6
	Statements of Condensed Consolidated Equity	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6.	Exhibits	31

Signature		32

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)


	Three Months Ended March 31,
	2022		2021

	(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil	$	2,486,624	$	1,130,951
Loss on derivatives not designated as hedges	(3,077,637)		(188,813)
Net marketing services and other	11,903		7,785
Total operating revenues	(579,110)		949,923
Operating expenses:
Transportation and processing	516,104		445,784
Production	71,012		47,230
Exploration	772		949
Selling, general and administrative	69,096		45,006
Depreciation and depletion	422,098		377,116
Gain on sale/exchange of long-lived assets	(1,209)		(1,207)
Impairment of contract asset	184,945		—
Impairment and expiration of leases	29,991		16,757
Other operating expenses	16,347		9,443
Total operating expenses	1,309,156		941,078
Operating (loss) income	(1,888,266)		8,845
Loss (income) from investments	20,785		(11,848)
Dividend and other income	(3,596)		(3,304)
Loss on debt extinguishment	6,923		4,424
Interest expense	67,902		70,473
Loss before income taxes	(1,980,280)		(50,900)
Income tax benefit	(465,697)		(12,959)
Net loss	(1,514,583)		(37,941)
Less: Net income (loss) attributable to noncontrolling interest	1,465		(514)
Net loss attributable to EQT Corporation	$	(1,516,048)	$	(37,427)

Loss per share of common stock attributable to EQT Corporation:
Basic and diluted:
Weighted average common stock outstanding	374,142		278,852
Net loss	$	(4.05)	$	(0.13)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE LOSS (UNAUDITED)


	Three Months Ended March 31,
	2022		2021

	(Thousands)
Net loss	$	(1,514,583)	$	(37,941)
Other comprehensive income, net of tax:
Other postretirement benefits liability adjustment, net of tax expense: $20 and $27	63		80
Comprehensive loss	(1,514,520)		(37,861)
Less: Comprehensive income (loss) attributable to noncontrolling interest	1,465		(514)
Comprehensive loss attributable to EQT Corporation	$	(1,515,985)	$	(37,347)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	March 31, 2022		December 31, 2021

	(Thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	16,913	$	113,963
Accounts receivable (less provision for doubtful accounts: $321 and $321)	1,212,596		1,438,031
Derivative instruments, at fair value	1,304,109		543,337
Prepaid expenses and other	492,312		191,435
Total current assets	3,025,930		2,286,766

Property, plant and equipment	26,304,423		26,016,092
Less: Accumulated depreciation and depletion	8,008,534		7,597,172
Net property, plant and equipment	18,295,889		18,418,920

Contract asset	29,250		410,000
Other assets	463,542		491,702
Total assets	$	21,814,611	$	21,607,388

LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	493,815	$	1,060,970
Accounts payable	1,416,274		1,339,251
Derivative instruments, at fair value	5,362,080		2,413,608
Other current liabilities	333,118		372,412
Total current liabilities	7,605,287		5,186,241

Credit facility borrowings	26,000		—
Senior notes	4,437,572		4,435,782
Note payable to EQM Midstream Partners, LP	92,891		94,320
Deferred income taxes	433,769		907,306
Other liabilities and credits	1,013,059		1,012,740
Total liabilities	13,608,578		11,636,389

Equity:
Common stock, no par value, shares authorized: 640,000, shares issued: 369,266 and 377,432	9,921,348		10,071,820
Treasury stock, shares at cost: 192 and 1,033	(2,848)		(18,046)
Accumulated deficit	(1,725,279)		(94,400)
Accumulated other comprehensive loss	(4,548)		(4,611)
Total common shareholders' equity	8,188,673		9,954,763
Noncontrolling interest in consolidated subsidiary	17,360		16,236
Total equity	8,206,033		9,970,999
Total liabilities and equity	$	21,814,611	$	21,607,388

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
	2022		2021

	(Thousands)
Cash flows from operating activities:
Net loss	$	(1,514,583)	$	(37,941)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax benefit	(473,557)		(11,970)
Depreciation and depletion	422,098		377,116
Impairments of long-lived assets and gain on sale/exchange of long-lived assets	213,727		15,550
Loss (income) from investments	20,785		(11,848)
Loss on debt extinguishment	6,923		4,424
Share-based compensation expense	7,470		6,239
Amortization, accretion and other	13,179		6,342
Loss on derivatives not designated as hedges	3,077,637		188,813
Net cash settlements paid on derivatives not designated as hedges	(885,539)		(38,140)
Net premiums received (paid) on derivative instruments	372		(3,147)
Changes in other assets and liabilities:
Accounts receivable	225,968		(112,899)
Accounts payable	52,867		116,732

Other current assets	(107,455)		(34,066)
Other items, net	(38,673)		(65,290)
Net cash provided by operating activities	1,021,219		399,915
Cash flows from investing activities:
Capital expenditures	(292,281)		(251,277)

Proceeds from sale of assets	1,258		—

Other investing activities	(149)		3,367
Net cash used in investing activities	(291,172)		(247,910)
Cash flows from financing activities:
Proceeds from credit facility borrowings	2,721,000		1,581,000
Repayment of credit facility borrowings	(2,695,000)		(1,581,000)


Repayment and retirement of debt	(570,174)		(126,396)
Premiums paid on debt extinguishment	(6,240)		(4,267)
Dividends paid	(47,063)		—
Cash paid for taxes related to net settlement of share-based incentive awards	(13,648)		(2,632)
Proceeds from exercises under employee compensation plans	1,214		—

Repurchase and retirement of common stock	(216,491)		—
(Distribution to) contribution from noncontrolling interest	(341)		3,750
Other financing activities	(354)		—
Net cash used in financing activities	(827,097)		(129,545)
Net change in cash and cash equivalents	(97,050)		22,460
Cash and cash equivalents at beginning of period	113,963		18,210
Cash and cash equivalents at end of period	$	16,913	$	40,670

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

See Note 1 for supplemental cash flow information.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)


	Common Stock
	Shares	No Par Value		Treasury Stock		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss (a)		Noncontrolling Interest in Consolidated Subsidiary		Total Equity

	(Thousands, except per share amounts)
Balance at January 1, 2021	278,345	$	8,145,539	$	(29,348)	$	1,056,626	$	(5,355)	$	7,490	$	9,174,952
Comprehensive loss, net of tax:
Net loss						(37,427)				(514)		(37,941)
Other postretirement benefits liability adjustment, net of tax expense: $27								80				80
Share-based compensation plans	436	(3,041)		7,879								4,838
Contribution from noncontrolling interest										3,750		3,750
Balance at March 31, 2021	278,781	$	8,142,498	$	(21,469)	$	1,019,199	$	(5,275)	$	10,726	$	9,145,679

Balance at January 1, 2022	376,399	$	10,071,820	$	(18,046)	$	(94,400)	$	(4,611)	$	16,236	$	9,970,999
Comprehensive loss, net of tax:
Net (loss) income						(1,516,048)				1,465		(1,514,583)
Other postretirement benefits liability adjustment, net of tax expense: $20								63				63
Dividends ($0.125 share)						(47,063)						(47,063)
Share-based compensation plans	1,207	(18,220)		15,198								(3,022)
Issuance of common stock for Convertible Notes settlement (Note 6)	1	8										8
Repurchase and retirement of common stock	(8,533)	(132,260)				(67,768)						(200,028)
Distribution to noncontrolling interest										(341)

SEC Form 10-Q filed by EQT Corporation