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 ~~JUNE 30, 2020~~MARCH 31, 2021

☐

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)~~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 ~~July 22, 2020, 255,603,156~~April 30, 2021, 279,098,036 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 ~~for the Three~~ ~~and Six~~ ~~Months Ended~~ ~~June~~ 3 0 ~~, 2020 and 2019~~

Statements of Condensed Consolidated Comprehensive (Loss) Income ~~for the Three~~ ~~and Six~~ ~~Months Ended~~ ~~June~~ 3 0 ~~, 2020 and 2019~~

Condensed Consolidated Balance Sheets

Statements of Condensed Consolidated Cash Flows ~~for the~~ ~~Six~~ ~~Months Ended~~ ~~June~~ 3 0 ~~, 2020 and 2019~~

~~Condensed Consolidated Balance Sheets as of~~ ~~June~~ 3 0 ~~, 2020 and December 31, 2019~~

Statements of Condensed Consolidated Equity ~~for the Three~~ ~~and Six~~ ~~Months Ended~~ ~~June~~ 3 0 ~~, 2020 and 2019~~

Notes to the Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2018

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3427

Item 4.

Controls and Procedures

3628

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(Thousands, except per share amounts)														(Thousands, except per share amounts)
Operating revenues:	Operating revenues:									Operating revenues:
Sales of natural gas, natural gas liquids and oil	Sales of natural gas, natural gas liquids and oil	$	498,772	$	900,527	$	1,213,973	$	2,172,140	Sales of natural gas, natural gas liquids and oil	$	1,130,951	$	715,201
Gain on derivatives not designated as hedges		26,426		407,635		415,862		275,639
(Loss) gain on derivatives not designated as hedges										(Loss) gain on derivatives not designated as hedges	(188,813)		389,436
Net marketing services and other	Net marketing services and other	1,876		2,090		4,296		5,646		Net marketing services and other	7,785		2,420
Total operating revenues	Total operating revenues	527,074		1,310,252		1,634,131		2,453,425		Total operating revenues	949,923		1,107,057
Operating expenses:	Operating expenses:									Operating expenses:
Transportation and processing	Transportation and processing	405,636		436,984		845,470		876,230		Transportation and processing	445,784		439,834
Production	Production	38,329		36,316		78,709		79,724		Production	47,230		40,380
Exploration	Exploration	876		1,857		1,799		2,864		Exploration	949		923
Selling, general and administrative	Selling, general and administrative	43,341		86,208		78,279		135,186		Selling, general and administrative	45,006		34,938
Depreciation and depletion	Depreciation and depletion	323,096		372,413		680,622		763,526		Depreciation and depletion	377,116		357,526
Amortization of intangible assets	Amortization of intangible assets	7,477		10,342		14,955		20,684		Amortization of intangible assets	0		7,478
Loss on sale/exchange of long-lived assets		49,207		—		98,059		—

(Gain) loss on sale/exchange of long-lived assets										(Gain) loss on sale/exchange of long-lived assets	(1,207)		48,852
Impairment and expiration of leases	Impairment and expiration of leases	41,279		48,584		95,047		78,118		Impairment and expiration of leases	16,757		53,768
Transaction, proxy and reorganization		4,745		21,518		4,745		25,607
Other operating expenses										Other operating expenses	9,443		0
Total operating expenses	Total operating expenses	913,986		1,014,222		1,897,685		1,981,939		Total operating expenses	941,078		983,699
Operating (loss) income		(386,912)		296,030		(263,554)		471,486
Gain on Equitrans Share Exchange		—		—		(187,223)		—
(Gain) loss on investment in Equitrans Midstream Corporation		(82,983)		104,741		307,645		15,686
Operating income										Operating income	8,845		123,358
Gain on Equitrans Share Exchange (see Note 8)										Gain on Equitrans Share Exchange (see Note 8)	0		(187,223)
(Income) loss from investments										(Income) loss from investments	(11,848)		390,628
Dividend and other income	Dividend and other income	(3,590)		(23,645)		(28,304)		(44,632)		Dividend and other income	(3,304)		(24,714)
Loss on debt extinguishment	Loss on debt extinguishment	353		—		16,963		—		Loss on debt extinguishment	4,424		16,610
Interest expense	Interest expense	65,386		50,503		127,760		107,076		Interest expense	75,099		62,374
(Loss) income before income taxes		(366,078)		164,431		(500,395)		393,356
Loss before income taxes										Loss before income taxes	(55,526)		(134,317)
Income tax (benefit) expense	Income tax (benefit) expense	(103,003)		38,865		(70,181)		77,099		Income tax (benefit) expense	(14,494)		32,822
Net (loss) income		$	(263,075)	$	125,566	$	(430,214)	$	316,257
Net loss										Net loss	(41,032)		(167,139)
Less: Net loss attributable to noncontrolling interest										Less: Net loss attributable to noncontrolling interest	(514)		0
Net loss attributable to EQT Corporation										Net loss attributable to EQT Corporation	$	(40,518)	$	(167,139)

(Loss) earnings per share of common stock:
Loss per share of common stock attributable to EQT Corporation:										Loss per share of common stock attributable to EQT Corporation:
Basic:	Basic:									Basic:
Weighted average common stock outstanding	Weighted average common stock outstanding	255,524		255,099		255,477		254,975		Weighted average common stock outstanding	278,852		255,435
Net (loss) income		$	(1.03)	$	0.49	$	(1.68)	$	1.24
Net loss										Net loss	$	(0.15)	$	(0.65)
Diluted:	Diluted:									Diluted:
Weighted average common stock outstanding	Weighted average common stock outstanding	255,524		255,223		255,477		255,211		Weighted average common stock outstanding	278,852		255,435
Net (loss) income		$	(1.03)	$	0.49	$	(1.68)	$	1.24
Net loss										Net loss	$	(0.15)	$	(0.65)

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) INCOME (UNAUDITED)

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(Thousands)
Net (loss) income $ (263,075) $ 125,566 $ (430,214) $ 316,257
Other comprehensive income (loss), net of tax:
Net change in interest rate cash flow hedges (a) — 42 — 84
Other post-retirement benefits liability adjustment (b) 72�� 76 84 152
Change in accounting principle (c) — — — (496)
Other comprehensive income (loss) 72 118 84 (260)
Comprehensive (loss) income $ (263,003) $ 125,684 $ (430,130) $ 315,997

~~(a)Net of tax expense of $10 and $20 for the three and six months ended June 30, 2019.~~

~~(b)Net of tax expense of $24 and $26 for the three months ended June 30, 2020 and 2019, respectively, and $48 and $52 for the six months ended June 30, 2020 and 2019, respectively.~~

~~(c)Related to adoption of Accounting Standards Update (ASU) 2018-02.~~


	Three Months Ended March 31,
	2021		2020
	(Thousands)
Net loss	$	(41,032)	$	(167,139)
Other comprehensive income, net of tax:
Other post-retirement benefits liability adjustment, net of tax expense: $27 and $24	80		12
Comprehensive loss	(40,952)		(167,127)
Less: Comprehensive loss attributable to noncontrolling interests	(514)		0
Comprehensive loss attributable to EQT Corporation	$	(40,438)	$	(167,127)

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

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

~~STATEMENTS OF~~ CONDENSED CONSOLIDATED ~~CASH FLOWS~~BALANCE SHEETS (UNAUDITED)

Six Months Ended June 30,
2020 2019
(Thousands)
Cash flows from operating activities:
Net (loss) income $ (430,214) $ 316,257
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income tax benefit 24,987 76,597
Depreciation and depletion 680,622 763,526
Amortization of intangible assets 14,955 20,684
Impairment of leases and loss on sale/exchange of long-lived assets 193,106 78,118
Gain on Equitrans Share Exchange (187,223) —
Loss on investment in Equitrans Midstream Corporation 307,645 15,686
Loss on debt extinguishment 16,963 —
Share-based compensation expense 8,123 9,501
Amortization, accretion and other 12,614 12,408
Gain on derivatives not designated as hedges (415,862) (275,639)
Cash settlements received (paid) on derivatives not designated as hedges 561,129 (10,490)
Net premiums (paid) received on derivative instruments (53,473) 26,406
Changes in other assets and liabilities:
Accounts receivable 206,322 467,055
Accounts payable (85,973) (253,463)
Tax receivable 96,920 4,186
Other items, net (3,520) 64,001
Net cash provided by operating activities 947,121 1,314,833
Cash flows from investing activities:
Capital expenditures (512,095) (765,781)
Proceeds from sale of assets 110,937 —
Cash received for Equitrans Share Exchange 52,323 —
Other investing activities (135) 1,152
Net cash used in investing activities (348,970) (764,629)
Cash flows from financing activities:
Proceeds from borrowings on credit facility 781,000 1,395,750
Repayment of borrowings on credit facility (1,037,000) (2,195,750)
Proceeds from issuance of debt 2,250,000 1,000,000
Debt issuance costs and Capped Call Transactions (See Note 6) (65,102) (913)
Repayments and retirements of debt (2,507,074) (702,298)
Premiums paid on debt extinguishment (13,635) —
Dividends paid (7,664) (15,317)
Cash paid for taxes related to net settlement of share-based incentive awards (304) (4,993)
Net cash used in financing activities (599,779) (523,521)
Net change in cash and cash equivalents (1,628) 26,683
Cash and cash equivalents at beginning of period 4,596 3,487
Cash and cash equivalents at end of period $ 2,968 $ 30,170
Cash paid (received) during the period for:
Interest, net of amount capitalized $ 74,596 $ 109,713
Income taxes, net (191,598) (2,394)
Non-cash activity during the period for:
Increase in right-of-use lease assets and liabilities $ 1,697 $ 89,021
Increase in asset retirement costs and obligations 6,596 2,456
Capitalization of non-cash equity share-based compensation 1,611 —


	March 31, 2021		December 31, 2020
	(Thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	40,670	$	18,210
Accounts receivable (less provision for doubtful accounts: $7,049 and $6,239)	682,496		566,552
Derivative instruments, at fair value	431,949		527,073
Prepaid expenses and other	158,590		103,615
Total current assets	1,313,705		1,215,450

Property, plant and equipment	22,168,856		21,995,249
Less: Accumulated depreciation and depletion	6,270,840		5,940,984
Net property, plant and equipment	15,898,016		16,054,265

Contract asset	390,005		410,000

Other assets	437,678		433,754
Total assets	$	18,039,404	$	18,113,469

LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	29,291	$	154,161
Accounts payable	812,273		705,461
Derivative instruments, at fair value	651,058		600,877
Other current liabilities	257,405		301,911
Total current liabilities	1,750,027		1,762,410

Credit facility borrowings	300,000		300,000
Senior notes	4,378,270		4,371,467
Note payable to EQM Midstream Partners, LP	98,487		99,838
Deferred income taxes	1,358,489		1,371,967
Other liabilities and credits	923,765		945,057
Total liabilities	8,809,038		8,850,739

Equity:
Common stock, 0 par value, shares authorized: 640,000, shares issued: 280,003	8,238,643		8,241,684
Treasury stock, shares at cost: 1,222 and 1,658	(21,469)		(29,348)
Retained earnings	1,007,741		1,048,259
Accumulated other comprehensive loss	(5,275)		(5,355)
Total common shareholders' equity	9,219,640		9,255,240
Noncontrolling interests in consolidated subsidiaries	10,726		7,490
Total equity	9,230,366		9,262,730
Total liabilities and equity	$	18,039,404	$	18,113,469

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

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED ~~BALANCE SHEETS~~CASH FLOWS (UNAUDITED)

June 30, 2020 December 31, 2019
(Thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 2,968 $ 4,596
Accounts receivable (less provision for doubtful accounts: $4,818 and $6,861) 341,461 610,088
Derivative instruments, at fair value 915,441 812,664
Tax receivable 201,934 298,854
Prepaid expenses and other 79,991 28,653
Total current assets 1,541,795 1,754,855
Property, plant and equipment 20,924,066 21,655,351
Less: Accumulated depreciation and depletion 5,219,993 5,499,861
Net property, plant and equipment 15,704,073 16,155,490
Intangible assets, net 11,050 26,006
Contract asset 355,469 —
Investment in Equitrans Midstream Corporation 210,241 676,009
Other assets 186,240 196,867
Total assets $ 18,008,868 $ 18,809,227
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of debt $ 16,309 $ 16,204
Accounts payable 686,512 796,438
Derivative instruments, at fair value 625,808 312,696
Other current liabilities 231,957 220,564
Total current liabilities 1,560,586 1,345,902
Credit facility borrowings 38,000 294,000
Term loan facility borrowings — 999,353
Senior notes 4,463,548 3,878,366
Note payable to EQM Midstream Partners, LP 102,483 105,056
Deferred income taxes 1,550,249 1,485,814
Other liabilities and credits 855,175 897,148
Total liabilities 8,570,041 9,005,639
Shareholders' equity:
Common stock, 0 par value, shares authorized: 320,000, shares issued: 257,003 7,889,072 7,818,205
Treasury stock, shares at cost: 1,713 and 1,832 (30,341) (32,507)
Retained earnings 1,585,211 2,023,089
Accumulated other comprehensive loss (5,115) (5,199)
Total shareholders' equity 9,438,827 9,803,588
Total liabilities and shareholders' equity $ 18,008,868 $ 18,809,227


	Three Months Ended March 31,
	2021		2020
	(Thousands)
Cash flows from operating activities:
Net loss	$	(41,032)	$	(167,139)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax (benefit) expense	(13,505)		127,860
Depreciation and depletion	377,116		357,526
Amortization of intangible assets	0		7,478
Loss on sale/exchange of long-lived assets and impairment and expiration of leases	15,550		102,620
Gain on Equitrans Share Exchange	0		(187,223)
(Income) loss from investments	(11,848)		390,628
Loss on debt extinguishment	4,424		16,610
Share-based compensation expense	6,239		4,684
Amortization, accretion and other	10,968		3,303
Loss (gain) on derivatives not designated as hedges	188,813		(389,436)
Cash settlements (paid) received on derivatives not designated as hedges	(38,140)		245,736
Net premiums (paid) on derivative instruments	(3,147)		0
Changes in other assets and liabilities:
Accounts receivable	(112,899)		149,057
Accounts payable	116,732		(85,840)
Income tax receivable and payable	(23,909)		(92,809)
Other items, net	(75,447)		17,207
Net cash provided by operating activities	399,915		500,262
Cash flows from investing activities:
Capital expenditures	(251,277)		(256,156)

Cash received for Equitrans Share Exchange	0		52,323
Other investing activities	3,367		140
Net cash used in investing activities	(247,910)		(203,693)
Cash flows from financing activities:
Proceeds from credit facility borrowings	1,581,000		206,000
Repayment of credit facility borrowings	(1,581,000)		(500,000)
Proceeds from issuance of debt	0		1,750,000
Debt issuance costs	0		(15,662)
Repayments and retirements of debt	(126,396)		(1,701,224)
Premiums paid on debt extinguishment	(4,267)		(13,660)
Contributions from noncontrolling interests	3,750		0
Dividends paid	0		(7,664)
Cash paid for taxes related to net settlement of share-based incentive awards	(2,632)		(304)
Net cash used in financing activities	(129,545)		(282,514)
Net change in cash and cash equivalents	22,460		14,055
Cash and cash equivalents at beginning of period	18,210		4,596
Cash and cash equivalents at end of period	$	40,670	$	18,651

Cash paid (received) during the period for:
Interest, net of amount capitalized	$	85,211	$	29,628
Income taxes, net	22,751		(1,950)
Non-cash activity during the period for:
Increase in right-of-use lease assets and liabilities	$	783	$	303
Increase in asset retirement costs and obligations	907		3,761
Capitalization of non-cash equity share-based compensation	1,228		0

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

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)

Common Stock Accumulated Other
Comprehensive Loss
Shares No Par Value Treasury Stock Retained Earnings Total Equity
(Thousands, except per share amounts)
Balance at April 1, 2019 254,999 $ 7,817,227 $ (39,665) $ 3,367,810 $ (5,784) $ 11,139,588
Comprehensive income, net of tax:
Net income 125,566 125,566
Net change in interest rate cash flow hedges, net of tax expense: $10 42 42
Other postretirement benefits liability adjustment, net of tax expense: $26 76 76
Dividends ($0.03 per share) (7,665) (7,665)
Share-based compensation plans 19 4,983 355 5,338
Other (222) (14,470) (14,470)
Balance at June 30, 2019 254,796 $ 7,807,740 $ (39,310) $ 3,485,711 $ (5,666) $ 11,248,475
Balance at April 1, 2020 255,262 $ 7,821,631 $ (30,852) $ 1,848,286 $ (5,187) $ 9,633,878
Comprehensive loss, net of tax:
Net loss (263,075) (263,075)
Other postretirement benefits liability adjustment, net of tax expense: $24 72 72
Share-based compensation plans 28 3,796 511 4,307
Equity component of convertible senior notes (See Note 6) 63,645 63,645
Balance at June 30, 2020 255,290 $ 7,889,072 $ (30,341) $ 1,585,211 $ (5,115) $ 9,438,827


	Common Stock							Accumulated Other Comprehensive Loss (a)		Noncontrolling Interests in Consolidated Subsidiaries
	Shares	No Par Value		Treasury Stock		Retained Earnings						Total Equity
	(Thousands, except per share amounts)
Balance at January 1, 2020	255,171	$	7,818,205	$	(32,507)	$	2,023,089	$	(5,199)	$	0	$	9,803,588
Comprehensive loss, net of tax:
Net loss						(167,139)						(167,139)
Other postretirement benefits liability adjustment, net of tax expense: $24								12				12
Dividends ($0.03 per share)						(7,664)						(7,664)
Share-based compensation plans	91	3,426		1,655								5,081

Balance at March 31, 2020	255,262	$	7,821,631	$	(30,852)	$	1,848,286	$	(5,187)	$	0	$	9,633,878

Balance at January 1, 2021	278,345	$	8,241,684	$	(29,348)	$	1,048,259	$	(5,355)	$	7,490	$	9,262,730
Comprehensive loss, net of tax:
Net loss						(40,518)				(514)		(41,032)
Other postretirement benefits liability adjustment, net of tax expense: $27								80				80
Share-based compensation plans	436	(3,041)		7,879								4,838
Contributions from noncontrolling interests										3,750		3,750
Balance at March 31, 2021	278,781	$	8,238,643	$	(21,469)	$	1,007,741	$	(5,275)	$	10,726	$	9,230,366

Common shares authorized: 320,000 ~~shares.~~ and 640,000 at March 31, 2020 and 2021, respectively.

Preferred shares authorized: ~~3,000 shares.~~3,000. There ~~are 0 preferred shares issued or outstanding.~~

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

~~Table of Contents~~

~~EQT CORPORATION AND SUBSIDIARIES~~

~~STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)~~

Common Stock Accumulated Other
Comprehensive Loss
Shares No Par Value Treasury Stock Retained Earnings Total Equity
(Thousands, except per share amounts)
Balance at January 1, 2019 254,472 $ 7,828,554 $ (49,194) $ 3,184,275 $ (5,406) $ 10,958,229
Comprehensive income, net of tax:
Net income 316,257 316,257
Net change in interest rate cash flow hedges, net of tax expense: $20 84 84
Other postretirement benefits liability adjustment, net of tax expense: $52 152 152
Dividends ($0.06 per share) (15,317) (15,317)
Share-based compensation plans 546 (6,344) 9,884 3,540
Change in accounting principle (a) 496 (496) —
Other (222) (14,470) (14,470)
Balance at June 30, 2019 254,796 $ 7,807,740 $ (39,310) $ 3,485,711 $ (5,666) $ 11,248,475
Balance at January 1, 2020 255,171 $ 7,818,205 $ (32,507) $ 2,023,089 $ (5,199) $ 9,803,588
Comprehensive loss, net of tax:
Net loss (430,214) (430,214)
Other postretirement benefits liability adjustment, net of tax expense: $48 84 84
Dividends ($0.03 per share) (7,664) (7,664)
Share-based compensation plans 119 7,222 2,166 9,388
Equity component of convertible senior notes (See Note 6) 63,645 63,645
Balance at June 30, 2020 255,290 $ 7,889,072 $ (30,341) $ 1,585,211 $ (5,115) $ 9,438,827

~~Common shares authorized: 320,000 shares. Preferred shares authorized: 3,000 shares. There are~~were 0 preferred shares issued or outstanding.

(a)~~Related~~Amounts included in accumulated other comprehensive loss are related to ~~adoption~~other postretirement benefits liability adjustments, net of ~~ASU 2018-02~~.tax. Losses (gains), net of tax, are attributable to net actuarial losses and net prior service costs.

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

Table of Contents

EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (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 information and notes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, and the results of its operations, cash flows and equity for the three ~~and six~~ month periods ended ~~June 30, 2020~~March 31, 2021 and ~~2019 and its cash flows for the six month periods ended June 30, 2020 and 2019.~~2020. Certain previously reported amounts have been reclassified to conform to the current year presentation. In this Quarterly Report on Form 10-Q, references to "EQT," "EQT Corporation" and "the Company" refer collectively to EQT Corporation and its consolidated subsidiaries.

The Condensed Consolidated Balance Sheet at December 31, ~~2019~~2020 has been derived from the audited financial statements at that ~~date but does not include all information and notes required by GAAP for complete financial statements.~~

date. For further information, refer to the Consolidated Financial Statements and accompanying notes in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Recently Issued Accounting Standards

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (FASB) issued ~~ASU 2016-13,~~ ~~Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments~~. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold and requires entities to reflect their current estimate of all expected credit losses. The amendment affects loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from its scope that have a contractual right to receive cash. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2020 with no changes to its methodology, financial statements or disclosures.

~~In July 2018, the FASB issued ASU 2018-07,~~ ~~Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718,~~ ~~Compensation – Share Compensation,~~ to include share-based payment transactions where a grantor acquires goods or services from a nonemployee. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted this ASU on January 1, 2020 with no changes to its methodology, financial statements or disclosures.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement, Changes to the Disclosure Requirements for Fair Value Measurement~~. This ASU modifies the hierarchy associated with Level 1, 2 and 3 fair value measurements and the related disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted this ASU on January 1, 2020 with no changes to its methodology, financial statements or disclosures.

~~In August 2018, the FASB issued ASU 2018-15,~~ ~~Intangibles – Goodwill and Other – Internal-Use Software: Customer's~~ Accounting ~~for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract~~. This ASU provides guidance on accounting for implementation costs incurred by a customer in a cloud computing arrangement that is a service contract. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted this ASU prospectively on January 1, 2020, at which point onward applicable costs were capitalized to the Condensed Consolidated Balance Sheet rather than expensed to selling, general and administrative expense in the Statement of Condensed Consolidated Operations. For the three and six months ended June 30, 2020, such capitalized costs were approximately $3 million and $4 million, respectively.

~~In December 2019, the FASB issued ASU~~Standards Update (ASU) 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by eliminating certain exceptions to ASC 740, Income Taxes, related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes. In addition, this ASU simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates and provides clarification on accounting for transactions that result

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~~EQT Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

in a step up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted this ASU in the first quarter of 2021 with no material impact on its financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging: Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting for convertible instruments by removing certain separation models for convertible instruments. For convertible instruments with conversion features that are not accounted for as derivatives under ASC 815 or do not result in substantial premiums accounted for as paid-in capital, the convertible instrument's embedded conversion features are no longer separated from the host contract. Consequently, and as long as no other feature requires bifurcation and recognition as a derivative, the convertible instrument is accounted for as a single liability measured at its amortized cost. This ASU also amends the impact of convertible instruments on the calculation of diluted earnings per share (EPS) and adds several new disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company plans to adopt this ASU on January 1, 2022 using the full retrospective method of adoption. The Company is evaluating the impact this standard will have on its financial statements and related disclosures.

2. Revenue from Contracts with Customers

Under the Company's natural gas, natural gas liquids (NGLs) and oil sales contracts, 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 commodity 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, such as fixed price contracts or contracts with a fixed differential to New York Mercantile Exchange (NYMEX) or index prices, contain fixed consideration. 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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Based on management's judgment, the performance obligations for the sale of natural gas, NGLs and oil are satisfied at a point in time because the customer obtains control and legal title of the asset when the natural gas, NGLs or oil is delivered to the designated sales point.

The sales of natural gas, NGLs and oil presented in the Statements of Condensed Consolidated Operations represent the Company's share of revenues net of royalties and ~~excluding~~exclude revenue interests owned by others. When selling natural gas, NGLs and oil on behalf of royalty or working interest owners, the Company ~~is acting~~acts as an agent and, thus, reports the revenue on a net basis.

For contracts with customers where the Company's performance obligations had been satisfied and an unconditional right to consideration existed as of the balance sheet date, the Company recorded amounts due from contracts with customers of ~~$197.7~~$467.8 million and ~~$384.0~~$394.1 million in accounts receivable in the Condensed Consolidated Balance Sheets as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

The table below provides disaggregated information on the Company's revenues. Certain contracts that provide for the release of capacity that is not used to transport the Company's produced volumes are outside the scope of ASU 2014-09, Revenue from Contracts with Customers. The costs of, and recoveries on, such capacity are reported in net marketing services and other in the Statements of Condensed Consolidated Operations. Derivative contracts are also outside the scope of ASU 2014-09.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(Thousands)														(Thousands)
Revenues from contracts with customers:	Revenues from contracts with customers:									Revenues from contracts with customers:
Natural gas sales	Natural gas sales	$	468,216	$	843,867	$	1,141,446	$	2,037,716	Natural gas sales	$	1,013,080	$	673,230
NGLs sales	NGLs sales	28,761		46,520		64,517		116,124		NGLs sales	100,257		35,756
Oil sales	Oil sales	1,795		10,140		8,010		18,300		Oil sales	17,614		6,215
Total revenues from contracts with customers	Total revenues from contracts with customers	$	498,772	$	900,527	$	1,213,973	$	2,172,140	Total revenues from contracts with customers	$	1,130,951	$	715,201

Other sources of revenue:	Other sources of revenue:									Other sources of revenue:
Gain on derivatives not designated as hedges		26,426		407,635		415,862		275,639
(Loss) gain on derivatives not designated as hedges										(Loss) gain on derivatives not designated as hedges	(188,813)		389,436
Net marketing services and other	Net marketing services and other	1,876		2,090		4,296		5,646		Net marketing services and other	7,785		2,420
Total operating revenues	Total operating revenues	$	527,074	$	1,310,252	$	1,634,131	$	2,453,425	Total operating revenues	$	949,923	$	1,107,057

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~~EQT Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

The following table summarizes the transaction price allocated to the Company's remaining performance obligations on all contracts with fixed consideration as of ~~June 30, 2020.~~March 31, 2021. Amounts shown exclude contracts that qualified for the exception to the relative standalone selling price method as of ~~June 30, 2020.~~March 31, 2021.

2020 (a) 2021 2022 2023 Total
(Thousands)
Natural gas sales $ 17,694 $ 178,100 $ 8,158 $ 6,794 $ 210,746


	2021 (a)		2022		2023		Total
	(Thousands)
Natural gas sales	$	133,576	$	8,158	$	6,794	$	148,528

(a)~~July~~April 1 through December 31.

3. Derivative Instruments

The Company's primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the Company's operating results. The Company uses derivative commodity instruments to hedge its cash flows from sales of produced natural gas and NGLs. The overall objective of the Company's hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The derivative commodity instruments used by the Company are primarily swap, collar and option agreements. These agreements may require payments to, or receipt of payments from, counterparties based on the differential between two prices for the commodity. The Company uses these agreements to hedge its NYMEX and basis exposure. The Company may also use other contractual agreements when executing its commodity hedging strategy. The Company typically enters into over the counter

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(OTC) derivative commodity instruments with financial institutions, and the creditworthiness of all counterparties is regularly monitored.

The Company does not designate any of its derivative instruments as cash flow hedges; therefore, all changes in fair value of the Company's derivative instruments are recognized in operating revenues in the Statements of Condensed Consolidated Operations. The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. These derivative instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at any time.

Contracts that result in physical delivery of a commodity expected to be sold by the Company in the normal course of business are generally designated as normal sales and are exempt from derivative accounting. Contracts that result in the physical receipt or delivery of a commodity but are not designated or do not meet all of the criteria to qualify for the normal purchase and normal sale scope exception are subject to derivative accounting.

The Company's OTC derivative instruments generally require settlement in cash. The Company also enters into exchange traded derivative commodity instruments that are generally settled with offsetting positions. Settlements of derivative commodity instruments are reported as a component of cash flows from operating activities in the Statements of Condensed Consolidated Cash Flows.

With respect to the derivative commodity instruments held by the Company, the Company hedged portions of expected sales of production and portions of its basis exposure covering approximately ~~1,583 Bcf and 1,644~~1,954 Bcf of natural gas and 9,984 Mbbl of NGLs as of ~~June 30, 2020~~March 31, 2021 and 1,955 Bcf of natural gas and 3,462 Mbbl of NGLs as of December 31, ~~2019, respectively.~~2020. The open positions at both ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 had maturities extending through December 2024.

Certain of the Company's OTC derivative instrument contracts provide that, if the Company's credit rating assigned by Moody's Investors Service, Inc. (Moody's) or S&P Global Ratings (S&P) is below the agreed-upon credit rating threshold (typically, below investment grade), and if the associated derivative liability exceeds the agreed-upon dollar threshold for such credit rating, the counterparty to such contract can require the Company to deposit collateral. Similarly, if such counterparty's credit rating assigned by Moody's or S&P is below the agreed-upon credit rating threshold, and if the associated derivative liability exceeds the agreed-upon dollar threshold for such credit rating, the Company can require the counterparty to deposit collateral with the Company. Such collateral can be up to 100% of the derivative liability. Investment grade refers to the quality of a company's credit as assessed by one or more credit rating agencies. To be considered investment grade, a company must be rated "Baa3" or higher by Moody's, "BBB–" or higher by S&P and "BBB–" or higher by Fitch Rating Service (Fitch). Anything below these ratings is considered non-investment grade. As of ~~June 30, 2020,~~March 31, 2021, the Company's senior notes were rated ~~"Ba3"~~"Ba2" by Moody's and ~~"BB–"~~"BB" by S&P.

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

When the net fair value of any of the Company's OTC derivative instrument contracts represents a liability to the Company that is in excess of the agreed-upon dollar threshold for the Company's then-applicable credit rating, the counterparty has the right to require the Company to remit funds as a margin deposit in an amount equal to the portion of the derivative liability that is in excess of the dollar threshold amount. The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets. As of ~~June 30,~~March 31, 2021 and December 31, 2020, the aggregate fair value of all OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was ~~$6.2~~$176.6 million and $137.7 million, respectively, for which the Company deposited and recorded ~~as a~~ current ~~asset $2.4 million. As~~assets of ~~December 31, 2019, there were~~ 0 ~~such deposits recorded in the Condensed Consolidated Balance Sheet.~~and $21.1 million, respectively.

When the net fair value of any of the Company's OTC derivative instrument contracts represents an asset to the Company that is in excess of the agreed-upon dollar threshold for the counterparty's then-applicable credit rating, the Company has the right to require the counterparty to remit funds as a margin deposit in an amount equal to the portion of the derivative asset that is in excess of the dollar threshold amount. The Company records these deposits as a current liability in the Condensed Consolidated Balance Sheets. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, there were 0 such deposits recorded in the Condensed Consolidated Balance Sheets.

When the Company enters into exchange traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker as good-faith deposits to guard against the risks associated with changing market conditions. The Company is required to make such deposits based on an established initial margin requirement and the net liability position, if any, of the fair value of the associated contracts. The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets. When the fair value of such contracts is in a net asset position, the broker may remit funds to the Company. The Company records these deposits as a current liability in the Condensed Consolidated Balance Sheets. The initial margin

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

requirements are established by the exchanges based on the price, volatility and the time to expiration of the contract. The margin requirements are subject to change at the exchanges' discretion. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company recorded ~~$6.9~~$111.7 million and ~~$12.6~~$61.5 million, respectively, of such deposits as a current ~~asset. As of June 30, 2020,~~assets in the ~~Company recorded $13.6 million of such deposits as a current liability. As of December 31, 2019, there were 0 such deposits recorded as a current liability.~~Condensed Consolidated Balance Sheets.

Refer to Note 98 for a discussion of the derivative liability recorded in connection with the Equitrans Share Exchange (defined in Note 9)8).

The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The table below summarizes the impact of netting agreements and margin deposits on gross derivative assets and liabilities.


		Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets		Derivative instruments subject to master netting agreements		Margin requirements with counterparties		Net derivative instruments			Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets		Derivative instruments subject to master netting agreements		Margin requirements with counterparties		Net derivative instruments
		(Thousands)															(Thousands)
June 30, 2020
March 31, 2021										March 31, 2021
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	915,441	$	(441,923)	$	(13,609)	$	459,909	Asset derivative instruments, at fair value	$	431,949	$	(340,292)	$	0	$	91,657
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	625,808		(441,923)		(9,257)		174,628		Liability derivative instruments, at fair value	651,058		(340,292)		(111,737)		199,029

December 31, 2019
December 31, 2020										December 31, 2020
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	812,664	$	(226,116)	$	—	$	586,548	Asset derivative instruments, at fair value	$	527,073	$	(328,809)	$	0	$	198,264
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	312,696		(226,116)		(12,606)		73,974		Liability derivative instruments, at fair value	600,877		(328,809)		(82,552)		189,516

The Company has not executed any interest rate swaps since 2011. As of December 31, 2019, amounts related to historical interest rate swaps that had been previously recorded in accumulated other comprehensive income (OCI) were fully reclassified into interest expense. See Note 8.

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

4. Fair Value Measurements

The Company records its financial instruments, which are principally derivative instruments, at fair value in the Condensed Consolidated Balance Sheets. The Company estimates the fair value of its financial instruments using quoted market prices when available. If quoted market prices are not available, the fair value is based on models that use market-based parameters, including forward curves, discount rates, volatilities and nonperformance risk, as inputs. Nonperformance risk considers the effect of the Company's credit standing on the fair value of liabilities and the effect of the counterparty's credit standing on the fair value of assets. The Company estimates nonperformance risk by analyzing publicly available market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company's or counterparty's credit rating and the yield on a risk-free instrument.

The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities that use Level 2 inputs primarily include the Company's swap, collar and option agreements.

Exchange traded commodity swaps have Level 1 inputs. The fair value of the commodity swaps with Level 2 inputs is based on standard industry income approach models that use significant observable inputs, including, but not limited to, NYMEX natural gas forward curves, LIBOR-based discount rates, basis forward curves and natural gas liquids forward curves. The Company's collars and options are valued using standard industry income approach option models. The significant observable inputs used by the option pricing models include NYMEX forward curves, natural gas volatilities and LIBOR-based discount rates.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The table below summarizes assets and liabilities measured at fair value on a recurring basis.


		Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets		Fair value measurements at reporting date using:																Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets				Fair value measurements at reporting date using:
						Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets			Quoted prices in active markets for identical assets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
		(Thousands)																				(Thousands)
June 30, 2020
March 31, 2021												March 31, 2021
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	915,441	$	133,817		$	781,624		$	—	Asset derivative instruments, at fair value	$	431,949				$	65,167			$	366,782			$	0
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	625,808		111,315			514,493			—		Liability derivative instruments, at fair value	651,058			120,650				530,408				0

December 31, 2019
December 31, 2020												December 31, 2020
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	812,664	$	95,041		$	717,623		$	—	Asset derivative instruments, at fair value	$	527,073		$	70,603			$	456,470			$	0
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	312,696		71,107			241,589			—		Liability derivative instruments, at fair value	600,877			93,361				507,516				0

The carrying values of cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities. The carrying value of the Company's investment in Equitrans Midstream Corporation (Equitrans Midstream) approximates fair value as Equitrans Midstream is a publicly traded company. The carrying ~~values~~value of borrowings onunder the Company's credit facility ~~and term loan facility approximate~~approximates fair value as the interest ~~rates are~~rate is based on prevailing market rates. The Company considered all of these fair values to be Level 1 fair value measurements.

The Company has an immaterial investment in a fund that invests in companies developing technology and operating solutions for exploration and production companies. The investment is valued using, as a practical expedient, the net asset value provided in the financial statements received from fund managers and is recorded in other assets in the Condensed Consolidated Balance Sheets.

The Company estimates the fair value of its senior notes using established fair value methodology. Because not all of the Company's senior notes are actively traded, their fair value is a Level 2 fair value measurement. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company's senior notes had a fair value of approximately ~~$4.4~~$5.2 billion ~~and $3.9 billion, respectively,~~ and a carrying value of approximately ~~$4.5~~$4.4 billion and ~~$3.9~~$4.5 billion, respectively, inclusive of any current portion. The fair value of the Company's note payable to EQM Midstream Partners, LP (EQM) is estimated using an income approach model with a ~~market-~~

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

~~based~~market-based discount rate and is a Level 3 fair value measurement. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company's note payable to EQM had a fair value of approximately ~~$132~~$122 million and ~~$128~~$130 million, respectively, and a carrying value of approximately ~~$108~~$104 million and ~~$110~~$105 million, respectively, inclusive of any current portion. See Note 6 for further discussion of the Company's debt.

The Company recognizes transfers between Levels as of the actual date of the event or change in circumstances that caused the transfer. There were no transfers between Levels 1, 2 and 3 during the periods presented.

See Note 98 for a discussion of the fair value measurement of the Equitrans Share Exchange and Note 109 for a discussion of the fair value measurement of the 2020 Asset Exchange Transactions and 2020 Divestiture (each defined in Note ~~10)~~9). See Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-Kfor the year ended December 31, ~~2019~~2020 for a discussion of the fair value of assets related to the impairment and expiration of leases.

5. Income Taxes

For the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company calculated the provision for income taxes for interim periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (pre-tax income or loss excluding unusual or infrequently occurring items) for the period. There were no material changes to the Company's methodology for determining unrecognized tax benefits during the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021.

The Company recorded income tax ~~benefit at an effective tax rate of 14.0% for the six months ended June 30, 2020 and income tax~~(benefit) expense at an effective tax rate of ~~19.6%~~26.1% and (24.4)% for the ~~six~~three months ended ~~June 30, 2019.~~March 31, 2021 and 2020, respectively. The Company's effective tax rate for the ~~six~~three months ended ~~June 30,~~March 31, 2021 was higher compared to the U.S. federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits, partially offset by tax expense relating to deduction limitations for executive compensation. The Company's effective tax rate for the three months ended March 31, 2020 was lower ~~compared to~~than the U.S. federal statutory rate due primarily to valuation allowances provided against federal and state deferred tax assets for the additional unrealized losses on the Company's investment in Equitrans Midstream incurred in the first ~~half~~quarter of 2020 that, if such investment is sold, would become capital losses. The Company believes it is more likely than not that such additional unrealized losses will not be realized for tax purposes.

~~The Company's effective tax rate for the six months ended June 30, 2019 was lower compared to the U.S. federal statutory rate due primarily to the Company's reversal~~

Table of its valuation allowances related to state net operating losses utilization against future taxable income and Alternative Minimum Tax (AMT) refund sequestration. The Company's reversal of its AMT refund valuation allowance resulted from a first quarter 2019 Internal Revenue Service (IRS) announcement that reversed the IRS's prior position that 6.2% of AMT refunds are subject to sequestration by the U.S. federal government.

Contents

~~On March 27, 2020, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (the CARES Act). The CARES Act accelerated the Company's ability~~EQT CORPORATION AND SUBSIDIARIES

Notes to claim federal refunds of AMT credits, increasing the Company's expected, collectable refund in 2020 by $94.8 million to $379.3 million, of which $189.6 million was received during the three months ended June 30, 2020 and the remainder is recorded in tax receivable in the Condensed Consolidated ~~Balance Sheet as of June 30, 2020. The CARES Act also increased~~Financial Statements (Unaudited)

On April 13, 2021, West Virginia enacted corporate income tax legislation that primarily impacts the ~~interest expense limitation from 30% to 50% of adjusted~~way that taxable income ~~(ATI) and provides the Company the option~~is apportioned to ~~use its 2019 ATI in 2020. Further, the CARES Act modified certain net operating loss (NOL) rules, including allowing five year carrybacks~~West Virginia for ~~NOLs arising in 2018, 2019 and 2020 and temporarily removing the 80% taxable income NOL utilization limit for those periods.~~tax years beginning on or after January 1, 2022. The Company ~~does not expect any other tax-related provisions~~is evaluating the impact of this change in law on the ~~CARES Act to have a material impact on its~~consolidated financial ~~statements and related disclosures.~~statements.

6. Debt

Credit facility. The Company has a $2.5 billion credit ~~facility that expires~~facility. On April 23, 2021, the Company entered into an Extension Agreement and First Amendment to Second Amended and Restated Credit Agreement (the Extension Agreement and First Amendment), amending the Second Amended and Restated Credit Agreement, dated as of July 31, 2017, among the Company, PNC Bank, National Association, as administrative agent, swing line lender and an L/C issuer and the other lenders party thereto (the Credit Agreement). The Extension Agreement and First Amendment, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement from July 31, 2022 to July 31, 2023, (ii) adds customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate and (iii) adds an additional pricing level for the Applicable Rate (as defined in ~~July 2022.~~the Credit Agreement).

The Company had ~~$0.8 billion~~approximately $770 million and $791 million of letters of credit outstanding under its credit facility as of ~~June 30, 2020~~March 31, 2021 and ~~0 letters of credit outstanding under its credit facility as of~~ December 31, ~~2019.~~2020, respectively.

Under the Company's credit facility, for the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the maximum amounts of outstanding borrowings were ~~$173~~$890 million and ~~$572~~$356 million, respectively, the average daily balances were approximately ~~$35~~$525 million and ~~$276~~$86 million, respectively, and interest was incurred at weighted average annual interest rates of ~~2.4%~~2.1% and ~~4.0%~~3.2%, respectively. Under the Company's credit facility, for the six months ended June 30, 2020 and 2019, the maximum amounts of outstanding borrowings were $356 million and $1,108 million, respectively, the average daily balances were approximately $60 million and $459 million, respectively, and interest was incurred at weighted average annual interest rates of 2.9% and 4.0%, respectively.

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

~~Based on the Company's senior notes credit rating as of June 30, 2020, the margin on base rate loans under the Company's credit facility was 1.00% and the margin on Eurodollar rate loans was 2.00%.~~

Term loan facility. The Company had a $1.0 billion term loan facility that was scheduled to mature in May 2021. During the second quarter 2020, the Company used proceeds from the offering of its Convertible Notes (see below), income tax refunds received ~~during~~by the ~~quarter (see Note 5)~~Company and proceeds from the 2020 Divestiture (see Note ~~10)~~9) to fully repay its term loan ~~facility. For the three and six months ended~~facility on June 30, ~~2020, the average daily balances were approximately $431 million and $692 million, respectively, and interest was incurred on~~2020. Under the Company's term loan facility, ~~borrowings~~from January 1, 2020 through March 31, 2020, the average daily balance was approximately $949 million and interest was incurred at a weighted average annual interest rate of 2.2% and 2.6%, respectively. As of June 30, 2019, the Company had $1.0 billion of outstanding borrowings under its term loan facility. For the period May 31, 2019 through June 30, 2019, interest was incurred on the Company's term loan facility borrowings at a weighted average annual interest rate of 3.4%2.8%. ~~Based on the Company's senior notes credit rating as of June 30, 2020 and December 31, 2019, the margin on the Company's term loan facility borrowings was 1.50% and 1.00%, respectively.~~

~~Adjustable Rate Notes.~~4.875% Senior Notes. On ~~January 21, 2020,~~February 1, 2021, the Company ~~issued $1.0 billion aggregate principal amount of 6.125% senior notes due February 1, 2025 and $750 million aggregate principal amount of 7.000% senior notes due February 1, 2030 (together,~~redeemed the Adjustable Rate Notes). The Company used the net proceeds from the Adjustable Rate Notes to repay $500 million aggregate principal amount of the Company's floating rate notes, $500 million aggregate principal amount of the Company's 2.50% senior notes, $500remaining $125.1 million aggregate principal amount of the Company's 4.875% senior notes and $200 million of the Company's term loan facility borrowings. The Company fully redeemed its floating rate notes and 2.50% senior notes at a price of 100% and 100.446% (inclusive of a make whole call premium), respectively, of each note's principal amount plus accrued but unpaid interest of $1.2 million and $4.2 million, respectively. This resulted in the payment of make whole call premiums of $2.2 million related to the Company's 2.50% senior notes. The $500 million aggregate principal amount of the Company's 4.875% senior notes was redeemed at a total cost of ~~$517.4~~$130.7 million, inclusive of ~~a tender premium~~redemption premiums of ~~$10.0~~$4.3 million and accrued but unpaid interest of ~~$7.4~~$1.3 million. ~~In addition, in April 2020, the Company repurchased $4.6 million aggregate principal amount of its 4.875% senior notes pursuant to open market purchases.~~

As a result of downgrades of the Company's senior notes credit rating that occurred subsequent to the issuance of the Adjustable Rate Notes, the interest rate on the 6.125% senior notes will increase to 7.875% and the interest rate on the 7.000% senior notes will increase to 8.750% beginning with the interest payment period that starts on August 1, 2020. The adjusted interest rate under the Adjustable Rate Notes cannot exceed 2% of the original interest rate first set forth on the face of the senior notes.

Convertible Notes. On April 28, 2020, the Company issued $500 million aggregate principal amount of 1.75% convertible senior notes (the Convertible Notes) due May 1, 2026 unless earlier redeemed, repurchased or converted. The Convertible Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. After deducting offering costs of $16.9 million and Capped Call Transactions (defined and described below) costs of $32.5 million, the net proceeds from the offering of $450.6 million were used to repay $450 million of the Company's term loan facility borrowings as well as for general corporate purposes.

~~Interest under the Convertible Notes is payable semiannually in arrears on May 1 and November 1 of each year beginning on November 1, 2020.~~

Holders of the Convertible Notes may convert their Convertible Notes, at their option, at any time prior to the close of business on January 30, 2026 under the following circumstances:

•during any quarter commencing after the quarter ended June 30, 2020 as long as the last reported price of EQT common stock for at least 20 trading days (consecutive or otherwise) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each such trading day;

•during the 5-business-day period after any 5-consecutive-trading-day period (the measurement period) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period is less than 98% of the product of the last reported price of EQT common stock and the conversion rate for the Convertible Notes on each such trading day;

•if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding such redemption date; and

•upon the occurrence of certain corporate events set forth in the Convertible Notes indenture.

On or after February 1, 2026, holders of the Convertible Notes may convert their Convertible Notes, at their option, at any time until the close of business on the second scheduled trading date immediately preceding May 1, 2026.

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EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Upon conversion of the Convertible Notes, the Company intends to use a combined settlement approach to satisfy its obligation by paying or delivering to holders of the Convertible Notes cash equal to the principal amount of the obligation and EQT common stock for amounts that exceed the principal amount of the obligation.

The Company may not redeem the Convertible Notes prior to May 5, 2023. On or after May 5, 2023 and prior to February 1, 2026, the Company may redeem for cash all or any portion of the Convertible Notes, at its option, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest up to the redemption date as long as the last reported price per share of EQT common stock has been at least 130% of the conversion price in effect for at least 20 trading days (consecutive or otherwise) during any 30-consecutive-trading-day period ending on the trading day immediately preceding the date on which the Company delivers notice of redemption. A sinking fund is not provided for the Convertible Notes.

The initial conversion rate for the Convertible Notes is 66.6667 shares of EQT common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of $15.00 per share of EQT common stock. The initial conversion price represents a premium of 20% to the $12.50 per share closing price of EQT common stock on April 23, 2020. The conversion rate is subject to adjustment under certain circumstances. In addition, following certain corporate events that occur prior to May 1, 2026 or if the Company delivers notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event or notice of redemption.

In connection with the Convertible Notes offering, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions), the purpose of which is to reduce the potential dilution to EQT common stock upon conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such obligation, with such reduction and offset subject to a cap. The Capped Call Transactions have an initial strike price of $15.00 per share of EQT common stock and an initial capped price of $18.75 per share of EQT common stock, each of which are subject to certain customary adjustments.

For accounting purposes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal value of the Convertible Notes. The equity component is not remeasured as long as it continues to meet the condition for equity classification. The excess of the principal amount of the liability component over its carrying amount (the debt discount) will be amortized to interest expense over the term of the Convertible Notes, which is approximately 6 years, at an effective interest rate of 8.4%. At inception, the Company recorded the Convertible Notes at fair value of approximately $358.1 million, a net deferred tax liability of $41.0 million and an equity component of $100.9 million.

Issuance costs were allocated to the liability and equity components of the Convertible Notes based on their relative fair values. Issuance costs attributable to the liability component of $12.1 million were recorded as a reduction to the liability component of the Convertible Notes and will be amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 8.4%. Issuance costs attributable to the equity component of $4.8 million, representing the conversion option, were netted with the equity component.

The Capped Call Transactions are separate from the Convertible Notes. The Capped Call Transactions were recorded in shareholders' equity and were not accounted for as derivatives. The cost to purchase the Capped Call Transactions were recorded as a reduction to equity and will not be remeasured.

As of June 30, 2020, the net carrying amount of the Convertible Notes liability component consisted of principal of $500 million less the unamortized debt discount of $138.7 million and unamortized issuance costs of $11.9 million. During the ~~three and six months ended June 30, 2020, the Company recognized interest expense related to the Convertible Notes~~second quarter of ~~$4.9 million, consisting of contractual interest expense of $1.5 million, amortization of the debt discount of $3.2 million and amortization of issuance costs of $0.2 million.~~

~~For the three months ended June 30,~~ 2020, the Convertible Notes had a net shareholders' equity impact of $63.6 million, which consisted of the conversion option equity component of $100.9 million less the Capped Call Transactions costs of $32.5 million and issuance costs attributable to the equity component of $4.8 million.

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EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The table below summarizes the net carrying amount of the Convertible Notes, including the unamortized debt discount and debt issuance costs.


	March 31, 2021		December 31, 2020
	(Thousands)
Principal	$	500,000	$	500,000
Less: unamortized debt discount	124,151		129,103
Less: unamortized debt issuance costs	10,920		11,263
Net carrying value of Convertible Notes	$	364,929	$	359,634

~~Surety Bonds. During~~The table below summarizes the ~~three months ended June 30, 2020,~~components of interest expense related to the ~~Company issued approximately $93 million in surety bonds in response to its recent credit downgrades~~Convertible Notes.




	Three Months Ended March 31, 2021
	(Thousands)
Contractual interest expense	$	2,188
Amortization of debt discount	4,952
Amortization of issuance costs	343
Total Convertible Notes interest expense	$	7,483

Based on the closing stock price of EQT common stock of $18.58 on March 31, 2021, the if-converted value of the Convertible Notes exceeded the principal amount by ~~Moody's, S&P and Fitch.~~$119 million. The Convertible Notes were not convertible at March 31, 2021.

7. Earnings Per Share ~~(EPS)~~

In periods when the Company reports a net loss, all options, restricted stock, performance awards and stock appreciation rights are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share. As a result, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, all securities, totaling ~~6,769,822~~7,745,522 and ~~6,739,305,~~6,753,915, respectively, ~~were excluded from potentially dilutive securities because of their anti-dilutive effect on EPS.~~

For the three and six months ended June 30, 2019, potentially dilutive securities included in the calculation of diluted weighted average shares outstanding were 124,250 and 235,743, respectively. For both the three and six months ended June 30, 2019, options to purchase common stock of 1,885,529 were excluded from potentially dilutive securities because of their anti-dilutive effect on EPS.

As discussed in Note 6, the Company issued the Convertible Notes during the second quarter of 2020 and, upon conversion of the Convertible Notes, intends to use a combined settlement approach to satisfy its obligation under the Convertible Notes. As such, there is no adjustment to the diluted EPS numerator for the cash-settled portion of the instrument. In addition, for the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, the conversion premium of 6,666,670 shares was excluded from potentially dilutive securities because of its anti-dilutive effect on EPS.

8. ~~Changes in Accumulated OCI (Loss) by Component~~

~~The following table summarizes the changes in accumulated OCI (loss) by component.~~

Interest rate cash
flow hedges, net of tax Other postretirement
benefits liability adjustment,
net of tax Accumulated OCI (loss),
net of tax
(Thousands)
April 1, 2019 $ (345) $ (5,439) $ (5,784)
Losses reclassified from accumulated OCI, net of tax 42 (a) 76 (b) 118
June 30, 2019 $ (303) $ (5,363) $ (5,666)
April 1, 2020 $ — $ (5,187) $ (5,187)
Losses reclassified from accumulated OCI, net of tax — 72 (b) 72
June 30, 2020 $ — $ (5,115) $ (5,115)
January 1, 2019 $ (387) $ (5,019) $ (5,406)
Losses reclassified from accumulated OCI, net of tax 84 (a) 152 (b) 236
Change in accounting principle — (496) (c) (496)
June 30, 2019 $ (303) $ (5,363) $ (5,666)
January 1, 2020 $ — $ (5,199) $ (5,199)
Losses reclassified from accumulated OCI, net of tax — 84 (b) 84
June 30, 2020 $ — $ (5,115) $ (5,115)

~~(a)Losses, net of tax, related to interest rate cash flow hedges were reclassified from accumulated OCI into interest expense.~~

~~(b)Losses, net of tax, related to other postretirement benefits liability adjustments are attributable to net actuarial losses and net prior service costs.~~

~~(c)Related to adoption of ASU 2018-02.~~

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

9. Equitrans Share Exchange

On February 26, 2020, the Company entered into 2 share purchase agreements (the Share Purchase Agreements) with Equitrans Midstream, pursuant to which, among other things, the Company sold to Equitrans Midstream a total of 25,299,752 shares ~~or 50% of its ownership,~~ of Equitrans Midstream's common stock in exchange for approximately $52 million in cash and rate relief under certain of the Company's gathering contracts with EQM, an affiliate of Equitrans Midstream (the Equitrans Share Exchange). The transactions contemplated by the Share Purchase Agreements closed on March 5, 2020 (the Share Purchase Closing Date). The rate relief was effected through the execution of the Consolidated GGA (defined herein). ~~As of June 30, 2020, the Company owned 25,299,751 shares of Equitrans Midstream's common stock.~~

On February 26, 2020, the Company entered into a gas gathering and compression agreement (the Consolidated GGA) with an affiliate of EQM, pursuant to which, among other things, EQM agreed to provide to the Company gas gathering services in the Marcellus and Utica Shales of Pennsylvania and West Virginia, and the Company committed to an initial annual minimum volume commitment of 3.0 Bcf per day and an acreage dedication in Pennsylvania and West Virginia. The Consolidated GGA is effective through December 31, 2035 and will renew annually thereafter unless terminated by the Company or EQM. The Consolidated GGA provides for additional cash bonus payments (the Henry Hub Cash Bonus) payable by the Company to EQM during the period beginning on the first day of the quarter in which the Mountain Valley Pipeline (MVP) is placed in service and ending on the earlier of 36 months thereafter or December 31, 2024. Such payments are conditioned upon the quarterly average of the NYMEX Henry Hub natural gas settlement price exceeding certain price thresholds. In addition, the Consolidated GGA

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

provides a cash payment option that grants the Company the right to receive payments from EQM in the event that the MVP in-service date has not occurred prior to January 1, 2022.

On the Share Purchase Closing Date, the Company recorded in the Condensed Consolidated Balance Sheet a contract asset representing the estimated fair value of the rate relief provided by the Consolidated GGA of $410 million, ~~of which $54.5 million was classified as current as of June 30, 2020,~~ a derivative liability related to the Henry Hub Cash Bonus of approximately $117 million and a decrease in the Company's investment in Equitrans Midstream of approximately $158 million. The resulting gain of approximately $187 million was recorded in the Statement of Condensed Consolidated ~~Operations. Beginning in~~Operations during the first quarter of ~~2021,~~2020. Beginning with the MVP in-service date, the Company ~~will~~expects to recognize amortization of the contract asset over a period of approximately four years in a manner consistent with the expected timing of the Company's realization of the economic benefits of the rate relief provided by the Consolidated GGA. As of ~~June 30, 2020,~~March 31, 2021, the current portion of the contract asset was approximately $20 million. As of March 31, 2021, the derivative liability related to the Henry Hub Cash Bonus was approximately ~~$130~~$113 million.

The fair value of the contract asset was based on significant inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Key assumptions used in the fair value calculation included an estimated production volume forecast, ~~and~~ a market-based discount ~~rate.~~rate and a probability-weighted estimate of the in-service date of the MVP. The fair value of the derivative liability related to the Henry Hub Cash Bonus was based on significant inputs that were interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description of the fair value hierarchy.

~~10.~~9. 2020 Asset Exchange Transactions and 2020 Divestiture

2020 Asset Exchange ~~Transactions~~Transactions. . During the first ~~and second quarters~~quarter of 2020, the Company closed on various acreage trade agreements (collectively, the 2020 Asset Exchange Transactions), pursuant to which the Company exchanged approximately ~~11,700~~5,000 aggregate net revenue interest acres ~~across Greene, Allegheny and Westmoreland Counties, Pennsylvania and Wetzel and Marshall Counties, West Virginia~~ for approximately ~~11,700~~5,000 aggregate net revenue interest acres, ~~across~~all of which are located primarily in Greene ~~and Washington Counties, Pennsylvania and Wetzel~~ County, ~~West Virginia.~~Pennsylvania. As a result of the 2020 Asset Exchange Transactions, the Company recognized a loss of ~~$6.7~~$48.9 million ~~and $55.6 million~~ in (gain) loss on sale/exchange of long-lived assets in the ~~Statements~~Statement of Condensed Consolidated Operations ~~during~~for the three ~~and six~~ months ended ~~June 30, 2020, respectively.~~ March 31, 2020.

The fair value of leases acquired were based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. See Note 4 for a description of the fair value hierarchy. Key assumptions used in the fair value calculation included market-based prices for comparable acreage.

2020 Divestiture. On May 11, 2020, the Company closed a transaction to sell certain non-strategic assets located in Pennsylvania and West Virginia (the 2020 Divestiture) for an aggregate purchase price of approximately $125 million in cash, subject to customary purchase price adjustments and the Contingent Consideration defined and discussed below. The Pennsylvania assets sold included 80 Marcellus wells and approximately 33 miles of gathering lines; the West Virginia assets sold included 809 conventional wells and approximately 154 miles of gathering lines. In addition, the 2020 Divestiture relieved the Company of approximately

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~~EQT Corporation and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

~~$49~~ $49 million in asset retirement obligations and other liabilities associated with the sold assets. Proceeds from the sale were used to pay down the Company's term loan facility. ~~See Note 6.~~

The purchase and sale agreement for the 2020 Divestiture provides for additional cash bonus payments (the Contingent Consideration) payable to the Company of up to $20 million. Such Contingent Consideration is conditioned upon the three-month average of the NYMEX Henry Hub natural gas settlement price relative to stated floor and target price thresholds beginning on August 31, 2020 and ending on November 30, 2022. The Contingent Consideration represents an embedded derivative that ~~had 0~~is recorded at fair value in the Consolidated Balance Sheets. The Contingent Consideration had a fair value of $3.1 million and $1.9 million as of ~~both May 11,~~March 31, 2021 and December 31, 2020, ~~and June 30, 2020.~~respectively. Changes in fair value are recorded in (gain) loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations. The fair value of the Contingent Consideration ~~was~~is based on significant inputs that ~~were~~are interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description of the fair value hierarchy.

As a result of the 2020 Divestiture, the Company recognized a loss of $42.5 million in loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations during the second quarter of 2020.

~~11. Share-based Compensation Plans~~

Effective in 2020, the Management Development and Compensation Committee of the Company's Board of Directors (the Compensation Committee) adopted the 2020 Incentive Performance Share Unit Program (the 2020 Incentive PSU Program) under the 2019 Long-Term Incentive Plan. The 2020 Incentive PSU Program was established to provide long-term incentive opportunities to key employees to further align their interests with the interests of shareholders and customers and the strategic objectives of the Company. The Company granted 1,376,198 units under the 2020 Incentive PSU Program during the first quarter of 2020. The units will vest following a ~~three~~-year performance period and will be settled in EQT common stock. The payout factor will vary between 0 and 150% of the number of outstanding units contingent upon the performance of adjusted well costs, adjusted free cash flow and total shareholder return relative to a predefined peer group, in each case, over the performance period.

Effective January 13, 2020, the Compensation Committee granted 1,240,000 non-qualified stock appreciation rights exercisable in EQT common stock, cash or a combination thereof based on the excess of the fair market value of a share of EQT common stock as of the date of exercise over a base price of $10.00. The stock appreciation rights are subject to service and performance conditions.

Effective February 27, 2020, the Compensation Committee granted 1,000,000 non-qualified stock options to the President and Chief Executive Officer of the Company. The 2020 options expire on the seventh anniversary of the grant date, have an exercise price of $10.00 and vest in ~~three~~ ~~equal annual installments beginning on the first anniversary of the grant date.~~

Effective in 2020, the Compensation Committee granted 1,734,740 restricted stock equity awards. The restricted stock equity awards vest in three equal annual installments beginning on the first anniversary of the grant date, assuming continued employment with the Company by the award recipient.

1916

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EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

10. Subsequent Events

On May 5, 2021, the Company, through one of its wholly owned subsidiaries, entered into a membership interest purchase agreement (the Alta Purchase Agreement) with Alta Resources Development, LLC, a Delaware limited liability company (Alta), Alta Marcellus Development, LLC, a Delaware limited liability company (Alta Marcellus) and ARD Operating, LLC, a Delaware limited liability company (ARD), pursuant to which the Company agreed to acquire all of the issued and outstanding equity interests of Alta Marcellus and ARD, which collectively hold all of Alta’s upstream and midstream assets (the Alta Acquisition).

Pursuant to the terms of the Alta Purchase Agreement, the consideration to be paid by the Company for the Alta Acquisition consists of $1.0 billion in cash and 105,306,346 shares of EQT common stock (the Equity Consideration), subject to certain purchase price adjustments to be calculated as of the closing date (with all post effective date purchase price adjustments netted against the Equity Consideration). The Alta Purchase Agreement contains customary representations and warranties, covenants, indemnification and termination provisions and has an effective date of January 1, 2021.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT," the "Company," "we," "us," or "our" are to EQT Corporation and its subsidiaries, collectively.

CAUTIONARY STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof, in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the ~~matters discussed in section "Outlook" herein and the~~ expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, ~~of EQT Corporation and its subsidiaries (collectively, EQT or the Company),~~ including guidance regarding ~~the Company's~~our strategy to develop ~~its~~our reserves; drilling plans and programs (including ~~the number, type, depth, spacing, lateral lengths and location of wells to be drilled and the~~ availability of capital to complete these plans and programs); ~~projections~~the projected scope and timing of ~~wells to be drilled per~~our combo-development ~~project;~~projects; estimated reserves, including potential future downward adjustments of reserves and reserve life; total resource potential and drilling inventory duration; projected production and sales ~~volumes~~volume and growth rates (including liquids production and sales ~~volumes~~volume and growth rates); natural gas prices; changes in ~~basis; potential impacts to the Company's business~~basis and operations resulting from the COVID-19 pandemic; the effects of the COVID-19 pandemic and actions taken by the Organization of the Petroleum Exporting Countries (OPEC) and other allied countries (collectively known as OPEC+) as it pertains to the global supply and demand of, and prices for, natural gas, NGLs and oil; the impact of commodity prices on ~~the Company's~~our business; potential future impairments of ~~the Company's~~our assets; ~~the Company's~~our ability to reduce ~~its drilling and completions~~our well costs ~~other costs and expenses,~~ and capital expenditures, and the timing of achieving any such reductions; infrastructure programs; the cost, capacity, and timing of obtaining regulatory approvals; ~~the Company's~~our ability to successfully implement and execute ~~the executive management team's~~our operational, organizational, technological and ~~technological~~ESG initiatives, and achieve the anticipated results of such initiatives; ~~the~~ projected ~~reduction~~reductions of ~~the Company's~~our gathering and compression rates resulting from ~~the Company's~~our consolidated gas gathering and compression agreement with ~~EQM~~Equitrans Midstream ~~Partners, LP,~~Corporation (Equitrans Midstream), and the anticipated cost savings and other strategic benefits associated with the execution of such agreement; monetization transactions, including asset sales, joint ventures or other transactions involving ~~the Company's~~our assets, ~~the timing~~and our planned use of ~~such monetization transactions, if at all,~~ the ~~projected~~ proceeds from such monetization ~~transactions and the Company's planned use of such proceeds;~~transactions; potential acquisition ~~transactions;~~transactions or other strategic transactions, the ~~projected capital efficiency savings~~timing thereof and ~~other operating efficiencies~~our ability to achieve the intended operational, financial and ~~synergies resulting~~strategic benefits from ~~the Company's monetization transactions and acquisition~~any such transactions; the timing and structure of any dispositions of ~~the Company's~~our remaining retained shares of Equitrans ~~Midstream Corporation's (Equitrans Midstream)~~Midstream's common stock, and the planned use of the proceeds from any such dispositions; the amount and timing of any repayments, redemptions or repurchases of ~~EQT~~our common stock, outstanding debt securities or other debt instruments; ~~the Company's~~our ability to reduce ~~its~~our debt and the timing of such reductions, if any; projected dividends, if any; projected cash flows and free cash flow; projected capital expenditures; liquidity and financing requirements, including funding sources and availability; ~~the Company's~~our ability to maintain or improve ~~its~~our credit ratings, leverage levels and financial profile; ~~the Company's~~our hedging strategy; the effects of litigation, government regulation and tax position; and the expected impact of changes to tax laws.

The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. ~~The Company has~~We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by ~~the Company.~~us. While ~~the Company considers~~we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond ~~the Company's~~our control. ~~The~~These risks and uncertainties ~~that may affect the operations, performance and results of the Company's business and forward-looking statements~~ include, but are not limited to, ~~those set forth~~volatility of commodity prices; the costs and results of drilling and operations; access to and cost of capital; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and resources among our strategic opportunities; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; cyber security risks; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and water required to execute our exploration and development plans; the ability to obtain environmental and other permits and the timing thereof; government regulation or action; environmental and weather risks, including the possible impacts of climate change; and disruptions to our business due to acquisitions and other significant transactions. These and other risks and uncertainties are described under Item 1A., "Risk Factors" and elsewhere in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019, as updated by Part II, Item 1A., "Risk Factors" in this Quarterly Report on Form 10-Q and other documents the Company files from time to time with the Securities and Exchange Commission.~~2020.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Any forward-looking statement speaks only as of the date on which such statement is made, and ~~the Company does~~we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

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~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Consolidated Results of Operations

Net loss attributable to EQT Corporation for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$263.1~~$40.5 million, ~~$1.03~~$0.15 per diluted share, compared to net ~~income~~loss attributable to EQT Corporation for the same period in ~~2019~~2020 of ~~$125.6~~$167.1 million, ~~$0.49~~$0.65 per diluted share. The ~~decrease~~improvement was attributable primarily to ~~decreased operating revenues, the loss on sale/exchange~~higher sales of ~~long-lived assets, decreased dividend~~natural gas, NGLs and ~~other~~oil, income from investments, lower impairments and ~~increased interest expense,~~an income tax benefit, partly offset by ~~a gain on investment in Equitrans Midstream, increased income tax benefit, decreased depreciation and depletion expense and decreased selling, general and administrative expense.~~

Net loss for the six months ended June 30, 2020 was $430.2 million, $1.68 per diluted share, compared to net income for the same period in 2019 of $316.3 million, $1.24 per diluted share. The decrease was attributable primarily to decreased operating revenues, a loss on ~~investment in Equitrans Midstream and the loss on sale/exchange of long-lived assets, partly offset by~~derivatives not designated as hedges, the gain on the Equitrans Share Exchange (defined and discussed in Note 98 to the Condensed Consolidated Financial Statements), in the first quarter of 2020, lower dividends and other income, increased ~~income tax benefit, decreased~~ depreciation and depletion ~~expense~~ and ~~decreased~~increased selling, general and administrative expense.

See "Sales ~~Volumes~~Volume and ~~Revenues," "Production-Related Operating Expenses"~~Revenues" and ~~"Other Operating~~"Operating Expenses" for discussions of items affecting operating income and "Other Income Statement Items" for a discussion of other income statement items. See "Investing Activities" under "Capital Resources and Liquidity" for a discussion of capital expenditures.

Average Realized Price Reconciliation

The following table presents detailed natural gas and liquids operational information to assist in the understanding of ~~the Company's~~our consolidated operations, including the calculation of ~~the Company's~~our average realized price ($/Mcfe), which is based on adjusted operating revenues, a non-GAAP supplemental financial measure. Adjusted operating revenues is presented because it is an important measure ~~used by the Company's management~~we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues should not be considered as an alternative to total operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of adjusted operating revenues with total operating revenues, the most directly comparable financial measure calculated in accordance with GAAP.

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EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(Thousands, unless otherwise noted)														(Thousands, unless otherwise noted)
NATURAL GAS	NATURAL GAS									NATURAL GAS
Sales volume (MMcf)	Sales volume (MMcf)	325,248		351,211		694,990		714,928		Sales volume (MMcf)	390,298		369,742
NYMEX price ($/MMBtu) ~~(a)~~	NYMEX price ($/MMBtu) ~~(a)~~	$	1.71	$	2.64	$	1.84	$	2.90	NYMEX price ($/MMBtu) ~~(a)~~	$	2.69	$	1.95
Btu uplift	Btu uplift	0.09		0.12		0.09		0.14		Btu uplift	0.15		0.10
Natural gas price ($/Mcf)	Natural gas price ($/Mcf)	$	1.80	$	2.76	$	1.93	$	3.04	Natural gas price ($/Mcf)	$	2.84	$	2.05

Basis ($/Mcf) ~~(b)~~(a)	Basis ($/Mcf) ~~(b)~~(a)	$	(0.36)	$	(0.36)	$	(0.29)	$	(0.20)	Basis ($/Mcf) ~~(b)~~(a)	$	(0.25)	$	(0.22)
Cash settled basis swaps (not designated as hedges) ($/Mcf)	Cash settled basis swaps (not designated as hedges) ($/Mcf)	(0.02)		(0.05)		0.02		(0.08)		Cash settled basis swaps (not designated as hedges) ($/Mcf)	(0.09)		0.05
Average differential, including cash settled basis swaps ($/Mcf)	Average differential, including cash settled basis swaps ($/Mcf)	$	(0.38)	$	(0.41)	$	(0.27)	$	(0.28)	Average differential, including cash settled basis swaps ($/Mcf)	$	(0.34)	$	(0.17)

Average adjusted price ($/Mcf)	Average adjusted price ($/Mcf)	$	1.42	$	2.35	$	1.66	$	2.76	Average adjusted price ($/Mcf)	$	2.50	$	1.88
Cash settled derivatives (not designated as hedges) ($/Mcf)	Cash settled derivatives (not designated as hedges) ($/Mcf)	1.00		0.20		0.79		0.07		Cash settled derivatives (not designated as hedges) ($/Mcf)	(0.01)		0.60
Average natural gas price, including cash settled derivatives ($/Mcf)	Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.42	$	2.55	$	2.45	$	2.83	Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.49	$	2.48

Natural gas sales, including cash settled derivatives	Natural gas sales, including cash settled derivatives	$	786,595	$	896,441	$	1,702,006	$	2,025,642	Natural gas sales, including cash settled derivatives	$	972,494	$	915,411

LIQUIDS	LIQUIDS									LIQUIDS
Natural gas liquids (NGLs), excluding ethane:	Natural gas liquids (NGLs), excluding ethane:									Natural gas liquids (NGLs), excluding ethane:
Sales volume (MMcfe) (c)		10,572		11,201		21,392		23,750
Sales volume (MMcfe) (b)										Sales volume (MMcfe) (b)	14,600		10,820
Sales volume (Mbbl)	Sales volume (Mbbl)	1,762		1,867		3,565		3,958		Sales volume (Mbbl)	2,433		1,803
Price ($/Bbl)	Price ($/Bbl)	$	13.52	$	21.15	$	16.08	$	25.75	Price ($/Bbl)	$	37.28	$	18.58
Cash settled derivatives (not designated as hedges) ($/Bbl)	Cash settled derivatives (not designated as hedges) ($/Bbl)	(0.52)		2.86		(0.26)		2.22		Cash settled derivatives (not designated as hedges) ($/Bbl)	(2.99)		—
Average NGLs price, including cash settled derivatives ($/Bbl)	Average NGLs price, including cash settled derivatives ($/Bbl)	$	13.00	$	24.01	$	15.82	$	27.97	Average NGLs price, including cash settled derivatives ($/Bbl)	$	34.29	$	18.58
NGLs sales	NGLs sales	$	22,910	$	44,821	$	56,421	$	110,724	NGLs sales	$	83,443	$	33,511
Ethane:	Ethane:									Ethane:
Sales volume (MMcfe) (c)		8,769		6,455		12,098		12,393
Sales volume (MMcfe) (b)										Sales volume (MMcfe) (b)	8,587		3,329
Sales volume (Mbbl)	Sales volume (Mbbl)	1,461		1,076		2,016		2,066		Sales volume (Mbbl)	1,431		555
Price ($/Bbl)	Price ($/Bbl)	$	3.38	$	6.54	$	3.56	$	6.87	Price ($/Bbl)	$	6.66	$	4.05
Ethane sales	Ethane sales	$	4,941	$	7,038	$	7,186	$	14,190	Ethane sales	$	9,534	$	2,245
Oil:	Oil:									Oil:
Sales volume (MMcfe) (c)		1,058		1,247		2,237		2,513
Sales volume (MMcfe) (b)										Sales volume (MMcfe) (b)	1,705		1,179
Sales volume (Mbbl)	Sales volume (Mbbl)	176		208		373		419		Sales volume (Mbbl)	284		197
Price ($/Bbl)	Price ($/Bbl)	$	10.17	$	48.78	$	21.48	$	43.69	Price ($/Bbl)	$	61.98	$	31.63
Oil sales	Oil sales	$	1,795	$	10,140	$	8,010	$	18,300	Oil sales	$	17,614	$	6,215

Total liquids sales volume (MMcfe) (c)		20,399		18,903		35,727		38,656
Total liquids sales volume (MMcfe) (b)										Total liquids sales volume (MMcfe) (b)	24,892		15,328
Total liquids sales volume (Mbbl)	Total liquids sales volume (Mbbl)	3,399		3,151		5,954		6,443		Total liquids sales volume (Mbbl)	4,148		2,555
Total liquids sales	Total liquids sales	$	29,646	$	61,999	$	71,617	$	143,214	Total liquids sales	$	110,591	$	41,971

TOTAL	TOTAL									TOTAL
Total natural gas and liquids sales, including cash settled derivatives (d)		$	816,241	$	958,440	$	1,773,623	$	2,168,856
Total natural gas and liquids sales, including cash settled derivatives (c)										Total natural gas and liquids sales, including cash settled derivatives (c)	$	1,083,085	$	957,382
Total sales volume (MMcfe)	Total sales volume (MMcfe)	345,647		370,114		730,717		753,584		Total sales volume (MMcfe)	415,190		385,070
Average realized price ($/Mcfe)	Average realized price ($/Mcfe)	$	2.36	$	2.59	$	2.43	$	2.88	Average realized price ($/Mcfe)	$	2.61	$	2.49

(a)The Company's volume weighted New York Mercantile Exchange (NYMEX) natural gas price (actual average NYMEX natural gas price ($/MMBtu)) was $1.72 and $2.64 for the three months ended June 30, 2020 and 2019, respectively, and $1.83 and $2.89 for the six months ended June 30, 2020 and 2019, respectively.

~~(b)~~Basis represents the difference between the ultimate sales price for natural gas and the ~~NYMEX~~New York Mercantile Exchange (NYMEX) natural gas price.

~~(c)~~(b)NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.

~~(d)~~(c)Total natural gas and liquids sales, including cash settled derivatives, is also referred to in this report as adjusted operating revenues, a non-GAAP supplemental financial measure.

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EQT ~~Corporation and Subsidiaries~~CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Non-GAAP Financial Measures Reconciliation

The table below reconciles adjusted operating revenues, a non-GAAP supplemental financial measure, with total operating revenues, its most directly comparable financial measure calculated in accordance with GAAP. Adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure ~~used by the Company's management~~we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues excludes the revenue impacts of changes in the fair value of derivative instruments prior to settlement and net marketing services and other. ~~Management uses~~We use adjusted operating revenues to evaluate earnings trends because, as a result of the measure's exclusion of the often-volatile changes in the fair value of derivative instruments prior to settlement, the measure reflects only the impact of settled derivative contracts. Net marketing services and other primarily includes the costs of, and recoveries on, pipeline capacity releases. Because ~~management considers~~we consider net marketing services and other to be unrelated to ~~the Company's~~our natural gas and liquids production activities, adjusted operating revenues excludes net marketing services and other. ~~Management believes~~We believe that adjusted operating revenues provides useful information to investors for evaluating period-to-period comparisons of earnings trends.

Three Months Ended
June 30, Six Months Ended
June 30,
2020 2019 2020 2019
(Thousands, unless otherwise noted)
Total operating revenues $ 527,074 $ 1,310,252 $ 1,634,131 $ 2,453,425
Deduct (add):
Gain on derivatives not designated as hedges (26,426) (407,635) (415,862) (275,639)
Net cash settlements received (paid) on derivatives not designated as hedges 315,393 53,144 561,129 (10,490)
Premiums received (paid) for derivatives that settled during the period 2,076 4,769 (1,479) 7,206
Net marketing services and other (1,876) (2,090) (4,296) (5,646)
Adjusted operating revenues, a non-GAAP financial measure $ 816,241 $ 958,440 $ 1,773,623 $ 2,168,856
Total sales volumes (MMcfe) 345,647 370,114 730,717 753,584
Average realized price ($/Mcfe) $ 2.36 $ 2.59 $ 2.43 $ 2.88


	Three Months Ended March 31,
	2021		2020
	(Thousands, unless otherwise noted)
Total operating revenues	$	949,923	$	1,107,057
Add (deduct):
Loss (gain) on derivatives not designated as hedges	188,813		(389,436)
Net cash settlements (paid) received on derivatives not designated as hedges	(38,140)		245,736
Premiums (paid) for derivatives that settled during the period	(9,726)		(3,555)
Net marketing services and other	(7,785)		(2,420)
Adjusted operating revenues, a non-GAAP financial measure	$	1,083,085	$	957,382

Total sales volume (MMcfe)	415,190		385,070
Average realized price ($/Mcfe)	$	2.61	$	2.49

~~Table of Contents~~

~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Sales ~~Volumes~~Volume and Revenues


		Three Months Ended June 30,									Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		%	2020		2019		%		2021		2020		%
		(Thousands, unless otherwise noted)																	(Thousands, unless otherwise noted)
Sales volumes by shale (MMcfe):
Sales volume by shale (MMcfe):												Sales volume by shale (MMcfe):
Marcellus (a)	Marcellus (a)	305,752		318,588		(4.0)	639,503		645,673		(1.0)	Marcellus (a)	373,941		333,751		12.0
Ohio Utica	Ohio Utica	38,430		50,295		(23.6)	88,205		104,920		(15.9)	Ohio Utica	39,929		49,775		(19.8)
Other	Other	1,465		1,231		19.0	3,009		2,991		0.6	Other	1,320		1,544		(14.5)
Total sales volumes (b)		345,647		370,114		(6.6)	730,717		753,584		(3.0)
Total sales volume (b)												Total sales volume (b)	415,190		385,070		7.8

Average daily sales volumes (MMcfe/d)		3,798		4,067		(6.6)	4,015		4,163		(3.6)
Average daily sales volume (MMcfe/d)												Average daily sales volume (MMcfe/d)	4,613		4,232		9.0

Operating revenues:	Operating revenues:											Operating revenues:
Sales of natural gas, NGLs and oil	Sales of natural gas, NGLs and oil	$	498,772	$	900,527	(44.6)	$	1,213,973	$	2,172,140	(44.1)	Sales of natural gas, NGLs and oil	$	1,130,951	$	715,201	58.1
Gain on derivatives not designated as hedges		26,426		407,635		(93.5)	415,862		275,639		50.9
(Loss) gain on derivatives not designated as hedges												(Loss) gain on derivatives not designated as hedges	(188,813)		389,436		(148.5)
Net marketing services and other	Net marketing services and other	1,876		2,090		(10.2)	4,296		5,646		(23.9)	Net marketing services and other	7,785		2,420		221.7
Total operating revenues	Total operating revenues	$	527,074	$	1,310,252	(59.8)	$	1,634,131	$	2,453,425	(33.4)	Total operating revenues	$	949,923	$	1,107,057	(14.2)

(a)Includes Upper Devonian wells.

(b)NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.

~~Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019~~

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil ~~decreased~~increased for the three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due to higher sales volume and a ~~lower~~higher average realized ~~price and lower sales volumes.~~price. Average realized price ~~decreased~~

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

increased due to ~~lower~~higher NYMEX prices and ~~lower~~higher liquids prices, partly offset by ~~higher~~unfavorable cash settled derivatives. For the three months ended ~~June 30,~~March 31, 2021, we paid $38.1 million of net cash settlements on derivatives not designated as hedges and for the same period in 2020, ~~and 2019, the Company~~we received ~~$315.4~~$245.7 million ~~and $53.1 million, respectively,~~ of net cash settlements on derivatives not designated as hedges, which are included in average realized price but may not be included in operating revenues. Sales ~~volumes decreased due~~volume increased primarily as a result of sales volume of 34 Bcfe from upstream assets we acquired from Chevron U.S.A. Inc. in the fourth quarter of 2020 (Chevron Acquisition), partly offset by a decrease of 5 Bcfe attributable to assets we divested in the ~~Company's strategic decision to temporarily curtail approximately 1.4 Bcfe per day~~second quarter of ~~gross production, equivalent to approximately 1.0 Bcfe per day of net production, beginning on May 16, 2020 (the Strategic Production Curtailments).~~2020.

~~Gain~~(Loss) gain on derivatives not designated as hedges. For the three months ended ~~June 30, 2020 and 2019, the Company~~March 31, 2021, we recognized a ~~gain~~loss of ~~$26.4~~$188.8 million ~~and $407.6 million, respectively,~~ on derivatives not designated as ~~hedges.~~hedges and for the same period in 2020, we recognized a gain of $389.4 million. The ~~gains~~loss for the three months ended March 31, 2021 was related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices. The gain for the three months ended March 31, 2020 ~~and 2019 were~~was related primarily to increases in the fair market value of ~~the Company's~~our NYMEX swaps and options due to decreases in NYMEX forward prices.

~~Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019~~

~~Sales of natural gas, NGLs and oil.~~ Sales of natural gas, NGLs and oil decreased for the six months ended June 30, 2020 compared to the same period in 2019 due to a lower average realized price and lower sales volumes. Average realized price decreased due to lower NYMEX prices and lower liquids prices, partly offset by higher cash settled derivatives. For the six months ended June 30, 2020 and 2019, the Company received $561.1 million and paid $10.5 million, respectively, of net cash settlements on derivatives not designated as hedges, which are included in average realized price but may not be included in operating revenues. Sales volumes decreased due primarily to the Strategic Production Curtailments.

~~Gain on derivatives not designated as hedges.~~ For the six months ended June 30, 2020 and 2019, the Company recognized a gain of $415.9 million and $275.6 million, respectively, on derivatives not designated as hedges. The gain for 2020 was related primarily to increases in the fair market value of the Company's NYMEX swaps and options due to decreases in NYMEX forward prices. The gain for 2019 was related primarily to increases in the fair market value of the Company's NYMEX swaps and options due to decreases in NYMEX forward prices, partly offset by decreases in the fair market value of the Company's basis swaps due to increases in basis prices.

~~Table of Contents~~

~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

~~Production-Related~~ Operating Expenses

The following table presents information on ~~the Company's~~our production-related operating expenses.

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 % 2020 2019 %
(Thousands, unless otherwise noted)
Operating expenses:
Gathering $ 252,095 $ 255,085 (1.2) $ 513,816 $ 519,569 (1.1)
Transmission 119,515 149,164 (19.9) 266,677 291,587 (8.5)
Processing 34,026 32,735 3.9 64,977 65,074 (0.1)
Lease operating expenses (LOE), excluding production taxes 25,894 17,155 50.9 53,917 40,227 34.0
Production taxes 12,435 19,161 (35.1) 24,792 39,497 (37.2)
Exploration 876 1,857 (52.8) 1,799 2,864 (37.2)
Selling, general and administrative 43,341 86,208 (49.7) 78,279 135,186 (42.1)
Production depletion $ 317,905 $ 368,734 (13.8) $ 670,982 $ 756,148 (11.3)
Other depreciation and depletion 5,191 3,679 41.1 9,640 7,378 30.7
Total depreciation and depletion $ 323,096 $ 372,413 (13.2) $ 680,622 $ 763,526 (10.9)
Per Unit ($/Mcfe):
Gathering $ 0.73 $ 0.69 5.8 $ 0.70 $ 0.69 1.4
Transmission 0.35 0.40 (12.5) 0.36 0.39 (7.7)
Processing 0.10 0.09 11.1 0.09 0.09 —
LOE, excluding production taxes 0.07 0.05 40.0 0.07 0.05 40.0
Production taxes 0.04 0.05 (20.0) 0.03 0.05 (40.0)
Exploration — 0.01 (100.0) — — —
Selling, general and administrative 0.13 0.23 (43.5) 0.11 0.18 (38.9)
Production depletion 0.92 1.00 (8.0) 0.92 1.00 (8.0)

~~Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019~~


	Three Months Ended March 31,
	2021		2020		%
	(Thousands, unless otherwise noted)
Operating expenses:
Gathering	$	280,361	$	261,721	7.1
Transmission	124,872		147,162		(15.1)
Processing	40,551		30,951		31.0
Lease operating expenses (LOE), excluding production taxes	27,019		28,023		(3.6)
Production taxes	20,211		12,357		63.6
Exploration	949		923		2.8
Selling, general and administrative	45,006		34,938		28.8

Production depletion	$	373,008	$	353,077	5.6
Other depreciation and depletion	4,108		4,449		(7.7)
Total depreciation and depletion	$	377,116	$	357,526	5.5

Per Unit ($/Mcfe):
Gathering	$	0.68	$	0.68	—
Transmission	0.30		0.38		(21.1)
Processing	0.10		0.08		25.0
LOE, excluding production taxes	0.07		0.07		—
Production taxes	0.05		0.03		66.7
Exploration	—		—		—
Selling, general and administrative	0.11		0.09		22.2
Production depletion	0.90		0.92		(2.2)

~~Transportation and processing.~~Gathering. Gathering expense ~~decreased~~increased on an absolute basis for the three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due to ~~decreased volumes~~increased sales volume and additional gathering capacity acquired as a result of the ~~Strategic Production Curtailments, partly offset by~~Chevron Acquisition and a higher gathering rate structure as a result of the Consolidated GGA (defined and discussed in Note 98 to the Condensed Consolidated Financial Statements). ~~The Company expects~~We expect to realize fee relief and a lower gathering rate structure ~~as a result of~~from the Consolidated GGA beginning ~~in 2021. Gathering expense increased on a per Mcfe basis for~~with the three months ended June 30, 2020 compared to the same period in 2019 due primarily to higher gathering rates for the reasons described above as well as the impact of the Strategic Production Curtailments on the mix of volumes gathered and contracted rate structure. Mountain Valley Pipeline (MVP) in-service date.

Transmission. Transmission expense decreased on an absolute and per Mcfe basis for the three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline ~~partly offset by higher costs associated with additional capacity on~~and the Tennessee Gas Pipeline. ~~The decrease in transmission expense per Mcfe was partly offset by the 7% decrease in sales volumes.~~

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Processing. Processing expense increased on an absolute and per Mcfe basis for the three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due to higher liquid sales volume due primarily to ~~higher NGL transportation fees.~~the Chevron Acquisition and increased development of liquids-rich areas.

~~Production.~~Production taxes. ~~LOE~~Production taxes increased on an absolute and per Mcfe basis for the three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due primarily to ~~higher salt water disposal costs as well as higher repairs and maintenance costs~~increased West Virginia severance taxes as a result of ~~the Company's increased focus on optimizing production from currently producing wells. Production taxes decreased on an absolute~~higher prices and ~~per Mcfe basis for the three months ended June 30, 2020 compared to the same period in 2019 due primarily to lower~~

~~Table of Contents~~

~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

~~severance taxes and Pennsylvania impact fees as a result of lower commodity prices. LOE and production taxes per Mcfe were unfavorably impacted by the 7% decrease in~~ sales ~~volumes.~~

~~Selling, general and administrative.~~ Selling, general and administrative expense decreased on an absolute and per Mcfe basis for the three months ended June 30, 2020 compared to the same period in 2019 as a result of litigation expenses of $37.8 million recognized in 2019 as well as lower personnel costs due to reductions in workforce. The decrease per Mcfe was partly offset by the 7% decrease in sales volumes.

~~Depreciation and depletion.~~ ~~Production depletion decreased on an absolute and per Mcfe basis for the three months ended June 30, 2020 compared to the same period in 2019 due primarily to a lower depletion rate and lower volumes.~~

~~Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019~~

~~Transportation and processing.~~ Gathering expense decreased on an absolute basis for the six months ended June 30, 2020 compared to the same period in 2019 due to decreased volumes as a result of the Strategic Production Curtailments, partly offset by a higher gathering rate structure as a result of the Consolidated GGA. The Company expects to realize fee relief and a lower gathering rate structure as a result of the Consolidated GGA beginning in 2021. Gathering expense increased on a per Mcfe basis for the six months ended June 30, 2020 compared to the same period in 2019 due primarily to higher gathering rates for the reasons described above as well as the impact of the Strategic Production Curtailments on the mix of volumes gathered and contracted rate structure. Transmission expense decreased on an absolute and per Mcfe basis for the six months ended June 30, 2020 compared to the same period in 2019 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline, partly offset by higher costs associated with additional capacity on the Tennessee Gas Pipeline.

~~Production.~~ LOE increased on an absolute and per Mcfe basis for the six months ended June 30, 2020 compared to the same period in 2019 due primarily to higher salt water disposal costs as well as higher repairs and maintenance costs as a result of the Company's increased focus on optimizing production from currently producing wells. Production taxes decreased on an absolute and per Mcfe basis for the six months ended June 30, 2020 compared to the same period in 2019 due primarily to lower severance taxes and Pennsylvania impact fees as a result of lower commodity prices.volume.

Selling, general and administrative. Selling, general and administrative expense ~~decreased~~increased on an absolute and per Mcfe basis for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019 as a result of litigation expenses of $45.8 million recognized in 2019 as well as lower personnel~~2020 due primarily to higher long-term incentive compensation costs due to ~~reductions~~changes in ~~workforce.~~the fair value of awards.

Depreciation and depletion. Production depletion ~~decreased~~increased on an absolute ~~and per Mcfe~~ basis for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to the same period in ~~2019~~2020 due ~~primarily~~to increased sales volume, partly offset by a lower annual depletion rate. Production depletion decreased on a per Mcfe basis for the three months ended March 31, 2021 compared to the same period in 2020 due to a lower annual depletion ~~rate and lower volumes.~~rate.

~~Other Operating Expenses~~

Amortization of intangible assets. Amortization of intangible assets for the three months ended ~~June 30,~~March 31, 2020 was $7.5 ~~million compared to $10.3 million for the same period in 2019. Amortization of intangible assetsfor the six months ended June 30, 2020 was $15.0 million compared to $20.7 million for the same period in 2019.~~million. The ~~decreases were due primarily to the impairment of~~ intangible assets ~~recognized~~were fully amortized in the ~~third~~fourth quarter of ~~2019, which decreased the amortization rate.~~2020.

~~Loss~~(Gain) loss on sale/exchange of long-lived assets. During the ~~six months ended June 30,~~first quarter of 2020, ~~the Company~~we recognized a loss on ~~sale/~~exchange of long-lived assets of ~~$98.1 million, of which~~ $48.9 million related to the ~~first quarter 2020 Asset Exchange Transactions, $42.5 million related to the second quarter 2020 Divestiture and $6.7 million related to the second quarter~~ 2020 Asset Exchange Transactions. ~~The 2020 Asset Exchange Transactions and 2020 Divestiture are defined and discussed in~~See Note 109 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases. Impairment and expiration of leases for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$41.3~~$16.8 million compared to ~~$48.6~~$53.8 million for the same period in ~~2019.~~2020. The decrease was driven by decreased lease expirations. Impairment and expiration of leases for the six months ended June 30, 2020 was $95.0 million compared to $78.1 million for the same period in 2019. The increase was driven by increasedhigher lease expirations in ~~the first quarter of~~ 2020 due to ~~the Company's change in strategic focus to core development opportunities as well as~~ changes in market ~~condition.~~conditions.

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

~~Transaction, proxy and reorganization.~~Other operating expenses. ~~Transaction, proxy and reorganization expense~~Other operating expenses for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 of $9.4 million were ~~related~~due primarily to ~~transaction~~certain transaction-related costs associated with the Chevron Acquisition and ~~reorganization costs. Transaction, proxy and reorganization expense for the three and six months ended June 30, 2019 were related to proxy costs.~~changes in legal reserves, including settlements.

Other Income Statement Items

Gain on Equitrans Share Exchange. During the first quarter of 2020, ~~the Company~~we recognized a gain on the Equitrans Share Exchange of $187.2 million. See Note 98 to the Condensed Consolidated Financial Statements.

~~(Gain)~~(Income) loss from investments. For the three months ended March 31, 2021, we recognized a gain on an investment in a fund that invests in companies developing technology and operating solutions for exploration and production companies and a gain on our investment in Equitrans ~~Midstream Corporation.~~ The Company's investment in Equitrans Midstream is recorded at fair value by multiplying the closing stock price of Equitrans Midstream's common stock by the number of shares of Equitrans Midstream's common stock owned by the Company. Changes in fair value are recorded in (gain) loss on investment in Equitrans Midstream Corporation in the Statements of Condensed Consolidated Operations. The Company'sMidstream. Our investment in Equitrans Midstream fluctuates with changes in Equitrans Midstream's stock price, which was ~~$8.31~~$8.16 and ~~$13.36~~$8.04 as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. ~~Note,~~For the ~~effect~~three months ended March 31, 2020, we recognized a loss on our investment in Equitrans Midstream, due to a decrease in Equitrans Midstream's stock price during the three months ended March 31, 2020 as well as a decrease in the number of ~~the Company's sale of 50% of its ownership of its retained~~ shares of Equitrans Midstream's common stock ~~was recorded~~that we own as a ~~reduction to the investment in Equitrans Midstream in conjunction with the Company's recognition~~result of ~~the gain on~~ the Equitrans Share Exchange. ~~See Note 9 to the Condensed Consolidated Financial Statements.~~

Dividend and other income. Dividend and other income decreased for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 compared to the same ~~periods~~period in ~~2019~~2020 due primarily to lower dividends received from ~~the Company's~~our investment in Equitrans ~~Midstream.~~Midstream driven by the decrease in the number of shares of Equitrans Midstream's common stock that we own as well as a decrease in the dividend amount per share.

Loss on debt extinguishment. During the three ~~and six~~ months ended ~~June 30, 2020, the Company~~March 31, 2021, we recognized a loss on debt extinguishment of ~~$0.4~~$4.4 million ~~and $17.0 million, respectively,~~ related to the repayment of our 4.875% senior notes. During the ~~Company's~~three months ended March 31, 2020, we recognized a loss on debt extinguishment of $16.6 million related to the repayment of all or a portion of our 4.875% senior notes, 2.50% senior notes and floating rate ~~notes and term loan facility. See Note 6 to the Condensed Consolidated Financial Statements.~~notes.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Interest expense. Interest expense increased for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 compared to the same ~~periods~~period in ~~2019~~2020 due to increased interest incurred on new debt ~~including the senior notes~~and letters of credit issued ~~in January 2020, borrowings on the Company's term loan facility and the convertible senior notes issued in April~~throughout 2020 as well as ~~interest incurred on letters of~~higher borrowings under our credit ~~issued in 2020.~~facility. These increases were partly offset by lower interest incurred due to debt repayments throughout 2020 and the ~~repayment~~first quarter of ~~the Company's 8.125% senior notes, 4.875% senior notes, floating rate notes and 2.50% senior notes and decreased borrowings on the Company's credit facility.~~2021. See Note 6 to the Condensed Consolidated Financial Statements.

Income tax (benefit) expense. See Note 5 to the Condensed Consolidated Financial Statements.

~~Outlook~~

In 2020, the Company expects to spend $1.075 billion to $1.175 billion in total capital expenditures, which are expected to be funded by operating cash flow and, if required, borrowings on the Company's credit facility. Sales volumes in 2020 are expected to be 1,450 Bcfe to 1,500 Bcfe.

The Company's revenues, profitability, ability to grow, liquidity and financial performance are substantially dependent on the prices it receives for, and the Company's ability to develop its reserves of, natural gas, NGLs and oil. Changes in natural gas, NGLs and oil prices could affect, among other things, the Company's development plans, which would increase or decrease the pace of the development and the level of the Company's reserves, as well as the Company's revenues, earnings or liquidity. Lower prices and changes in development plans could also result in non-cash impairments of the book value of the Company's oil and gas properties or other long-lived assets or downward adjustments to the Company's estimated proved reserves. Any such impairments or downward adjustments to the Company's estimated reserves could potentially be material to the Company's financial statements. Increases in natural gas, NGLs or oil prices may be accompanied by, or result in, increased well drilling costs, production taxes, lease operating expenses, volatility in seasonal gas price spreads for the Company's storage assets and end-user conservation or conversion to alternative fuels. In addition, to the extent the Company has hedged its production at prices below the current market price, the Company will not benefit fully from any increase in the price of natural gas.

~~See "Critical Accounting Policies and Estimates" herein and Note 1 to the Consolidated Financial Statements in the Company's Annual Report on~~ ~~Form~~ 10 -K ~~for the year ended December 31, 2019 for a discussion of the Company's accounting policies and significant assumptions related to impairment of the Company's oil and gas properties.~~

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

See Item 1A., "Risk Factors – Natural gas, NGLs and oil price declines and changes in our development strategy have resulted in impairment of certain of our assets. Future declines in commodity prices, increases in operating costs or adverse changes in well performance or additional changes in our development strategy may result in additional write-downs of the carrying amounts of our assets, including long lived intangible assets, which could materially and adversely affect our results of operations in future periods" in the Company's Annual Report on ~~Form 10-~~K ~~for the year ended December 31, 2019.~~

~~COVID-19 and Oil Price War~~

The energy industry has recently experienced two significant external stimuli that have impacted, and are anticipated to continue impacting, both day-to-day operations and the macro environment. The novel coronavirus, or COVID-19, outbreak and voluntary and mandatory quarantines, travel restrictions and other restrictions throughout the United States and other parts of the world have resulted in decreased demand for natural gas, NGLs and oil. Additionally, in March 2020, the group of oil producing nations known as OPEC+ failed to reach an agreement over proposed oil production cuts stemming from the decrease in global demand for oil in light of the COVID-19 pandemic (the oil price war). Although the members of OPEC+ eventually reached an agreement to reduce their oil production beginning in May 2020 and continuing through April 2022, there remains significant uncertainty regarding the future actions of OPEC+, its members and other state-controlled oil companies related to oil price and production controls, including anticipated increases in supply from Russia and other members of OPEC+, particularly Saudi Arabia.

~~Impact of COVID-19 on the Company's Operations.~~ To date, the Company has experienced limited operational impacts as a direct result of work from home restrictions or COVID-19. As a "life-sustaining" business under the guidelines issued by each of the states in which the Company operates, the Company has been allowed to continue operations, provided that non-essential personnel have been required to work from home. One of the primary actions taken by the Company's new management team over the past twelve months has been the establishment of a digital work environment, which has allowed the Company to maintain the engagement and connectivity of its personnel as well as minimize the number of employees required in the office and field.

~~Impact of Oil Price War on the Company's Operations.~~ The Company has had, and expects to have, limited direct operational impacts from the oil price war. The oversupply of oil and NGLs resulting from the demand destruction attributable to the COVID-19 pandemic is anticipated by some market participants to result in a lack of storage capacity and ultimately the shutting in of certain oil and NGLs production. The Company has limited oil and NGLs exposure, with approximately 95% of its production being natural gas.

~~Impact of COVID-19 and Oil Price War on the Company's Outlook.~~ The prices for natural gas, NGLs and oil have historically been volatile; however, the volatility in the prices for these commodities has substantially increased as a result of recent world developments in 2020. Oil prices in particular drastically fell in March 2020, and, although prices have since risen from historic lows in April 2020, oil prices continue to be depressed. However, forward strip pricing for natural gas has increased meaningfully compared to strip prices prior to the COVID-19 pandemic and oil price war, with the principal contributing factor believed to be the market expectation that supply decreases in associated natural gas (defined as natural gas produced as a byproduct of principally oil production activities) as a result of reduced or curtailed operations in oil basins will more than offset reduced demand for natural gas as a result of the COVID-19 pandemic. The impact of these recent developments on natural gas prices and the Company's business are unpredictable, and there is no assurance that natural gas prices will remain at recently elevated prices or that any positive impact from the oil price war will outweigh the negative impact from reduced demand for natural gas as a result of the COVID-19 pandemic or other factors. See Item 1A., "Risk Factors" in the Company's Annual Report on ~~Form 10-K~~ for the year ended December 31, 2019, as well as Part II, Item 1A., "Risk Factors – The outbreak of the novel coronavirus, or COVID-19, has affected and may materially adversely affect, and any future outbreak of any other highly infectious or contagious diseases may materially adversely affect, our operations, financial performance and condition, operating results and cash flows" in this Quarterly Report on Form 10-Q.

~~Deleveraging Plan~~

In October 2019, the Company announced a plan to reduce its debt through asset monetizations and increased free cash flow (the Deleveraging Plan). The Deleveraging Plan contemplates generating targeted proceeds from monetizations of select, non-core exploration and production assets, core mineral assets and/or the Company's retained equity interest in Equitrans Midstream.

Given current market conditions, the Company intends to more selectively pursue non-core asset sales and opportunistically monetize its remaining equity interest in Equitrans Midstream in a strategic manner. The Company believes that the combination of the anticipated proceeds from monetization transactions, anticipated remaining income tax refunds of $201.9 million (in part

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

accelerated by the Coronavirus Aid, Relief and Economic Security Act (the CARES Act)) and improved realized free cash flow amounts as a result of accelerated well cost reductions will be sufficient to allow the Company to repay or refinance its remaining debt maturing in 2021 by the end of 2020 and begin repaying or refinancing its debt maturing after 2021. Until the Company's leverage target is achieved, the Company expects to use all free cash flow and divestiture proceeds to reduce its debt.

As discussed in Note 6 to the Condensed Consolidated Financial Statements, the Company issued the Convertible Notes during the second quarter of 2020. Upon conversion of the Convertible Notes, the Company intends to use a combined settlement approach to satisfy its obligation by paying or delivering to holders of the Convertible Notes cash equal to the principal amount of the obligation and EQT common stock for amounts that exceed the principal amount of the obligation. By settling its Convertible Notes obligation either partially or wholly in EQT common stock, the Company could favorably affect its leverage levels.

The successful execution of the Deleveraging Plan is based on the Company's current expectations, including with respect to matters beyond its control, and is subject to change. There can be no assurance that the Company will be able to find attractive asset monetization opportunities or that such transactions will be completed on its anticipated timeframe, if at all. Furthermore, the Company's estimated value for the assets to be monetized under the Deleveraging Plan involves multiple assumptions and judgments about future events that are inherently uncertain; accordingly, there can be no assurance that the resulting net cash proceeds from asset monetization transactions will be as anticipated, even if such transactions are consummated. Some of the factors that could affect the Company's ability to successfully execute the Deleveraging Plan include changes in the financial condition or prospects of prospective purchasers and the availability of financing to potential purchasers on reasonable terms, if at all, the number of prospective purchasers, the number of competing assets on the market, unfavorable economic conditions, industry trends and changes in laws and regulations. If the Company is not able to successfully execute the Deleveraging Plan or otherwise reduce debt to a level the Company believes is appropriate, the Company’s credit ratings may be lowered, the Company may reduce or delay its planned capital expenditures or investments and the Company may revise or delay its strategic plans.

Capital Resources and Liquidity

Although ~~the Company~~we cannot provide any assurance, ~~it believes~~we believe cash flows from operating activities and availability under ~~its~~our credit facility should be sufficient to meet ~~the Company's~~our cash requirements inclusive of, but not limited to, normal operating needs, debt service obligations, planned capital expenditures and commitments for at least the next twelve ~~months.~~

~~Operating Activities~~months and, based on current expectations, for the long-term.

Planned Capital Expenditures. In 2021, we expect to spend approximately $1,025 million to $1,125 million in total capital expenditures, excluding amounts attributable to noncontrolling interests, which are expected to be funded by operating cash flow and, if required, borrowings under our credit facility. Sales volume in 2021 is expected to be 1,620 Bcfe to 1,700 Bcfe.

Operating Activities. Net cash provided by operating activities was ~~$947~~$400 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to ~~$1,315~~$500 million for the same period in ~~2019.~~2020. The decrease was due primarily to ~~lower~~decreased cash ~~operating revenues~~settlements received on derivatives not designated as hedges and unfavorable timing of working capital payments, partly offset by ~~increased~~higher cash ~~settlements received on derivatives not designated as hedges and income tax refunds received of $189.6 million during the six months ended June 30, 2020.~~operating revenues.

~~The Company's~~Our cash flows from operating activities are affected by movements in the market price for commodities. ~~The Company is~~We are unable to predict such movements outside of the current market view as reflected in forward strip pricing. Refer to Item 1A., "Risk Factors – Natural gas, NGLs and oil price volatility, or a prolonged period of low natural gas, NGLs and oil prices, may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position" in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Investing ~~Activities~~

Activities.

Net cash used in investing activities was ~~$349~~$248 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to ~~$765~~$204 million for the same period in ~~2019.~~2020. The ~~decrease~~increase was due primarily to ~~lower capital expenditures as a result of the Company's change in strategic focus from production growth to capital efficiency as well as~~ cash received ~~from asset sales and~~during the first quarter of 2020 for the Equitrans Share ~~Exchange.~~Exchange, partly offset by lower capital expenditures.

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

The following table summarizes ~~the Company's~~our capital expenditures.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(Millions)														(Millions)
Reserve development	Reserve development	$	235	$	374	$	458	$	775	Reserve development	$	189	$	223
Land and lease(a)	Land and lease(a)	28		56		50		101		Land and lease(a)	23		22
Capitalized overhead	Capitalized overhead	13		24		24		41		Capitalized overhead	13		11
Capitalized interest	Capitalized interest	4		6		8		13		Capitalized interest	4		4
Other production infrastructure	Other production infrastructure	19		5		20		11		Other production infrastructure	5		1

Other corporate items	Other corporate items	4		1		5		1		Other corporate items	4		1
Total capital expenditures	Total capital expenditures	303		466		565		942		Total capital expenditures	238		262
Deduct: Non-cash items (a)		(47)		(71)		(53)		(176)
Add (deduct) non-cash items (b)										Add (deduct) non-cash items (b)	13		(6)
Total cash capital expenditures	Total cash capital expenditures	$	256	$	395	$	512	$	766	Total cash capital expenditures	$	251	$	256

(a)Capital expenditures attributable to noncontrolling interests were $1.3 million for the three months ended March 31, 2021.

(b)Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures and capitalized share-based compensation costs. The impact of accrued capital expenditures includes the reversal of the prior period accrual as well as the current period estimate.

Financing ~~Activities~~

Activities.

Net cash used in financing activities was ~~$600~~$130 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to ~~$524~~$283 million for the same period in ~~2019.~~2020. For the ~~six~~three months ended ~~June 30,~~March 31, 2021, the primary use of financing cash flows

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

was net repayments of debt. For the three months ended March 31, 2020, the primary uses of financing cash flows were net repayments of debt and credit facility borrowings, and the primary source of financing cash flows was net proceeds from the issuance of debt. For the six months ended June 30, 2019, the primary uses of financing cash flows were net repayments of credit facility borrowings and debt, and the primary source of financing cash flows was net proceeds from borrowings under the Company's term loan facility.

See Note 6 to the Condensed Consolidated Financial Statements for further discussion of ~~the Company's debt.~~

~~On March 26, 2020, the Company announced its suspension of the quarterly cash dividend on its common stock for purposes of accelerating cash flow to be used for the Deleveraging Plan.~~our debt and borrowings under our credit facility.

Depending on ~~the Company's~~our actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, ~~the Company~~we may from time to time seek to retire or repurchase ~~its~~our outstanding debt or equity securities through cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material. Additionally, ~~the Company plans~~we plan to dispose of ~~its~~our remaining retained shares of Equitrans Midstream's common stock and use the proceeds to reduce ~~the Company's~~our debt.

~~Income Tax Receivables~~

As of June 30, 2020, the Company had a tax receivable of $201.9 million in the Condensed Consolidated Balance Sheet. The tax receivable includes $189.7 million of expected federal refunds of Alternative Minimum Tax credits, $94.8 million of which was accelerated as a result of the CARES Act, and $12.2 million of expected refunds of 2018 state tax return overpayments. See Note 5 to the Condensed Consolidated Financial Statements for further discussion of the CARES Act.

~~Table of Contents~~

~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Security Ratings and Financing Triggers

The table below reflects the credit ratings and rating outlooks assigned to ~~the Company's~~our debt instruments as of ~~July 22, 2020. The Company's~~April 30, 2021. Our credit ratings and rating outlooks are subject to revision or withdrawal at any time by the assigning rating agency, and each rating should be evaluated independent from any other rating. ~~The Company~~We cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by a rating agency if, in the rating agency's judgment, circumstances so warrant. See Note 3 to the Condensed Consolidated Financial Statements for further discussion of what is deemed investment grade.

Rating agency

Senior notes

Outlook

Moody's Investors Service (Moody's)

~~Ba3~~Ba2

~~Negative~~Stable

Standard & Poor's Ratings Service (S&P)

~~BB–~~BB

~~Negative~~Stable

Fitch Ratings Service (Fitch)

Positive

Changes in credit ratings may affect ~~the Company's~~our access to the capital markets, the cost of short-term debt through interest rates and fees under ~~the Company's~~our lines of credit, the interest rate on the ~~Adjustable Rate Notes (defined in Note 6 to the Condensed Consolidated Financial Statements),~~senior notes with adjustable rates, the rates available on new long-term debt, ~~the Company's~~our pool of investors and funding sources, the borrowing costs and margin deposit requirements on our over the ~~Company's~~counter (OTC) derivative instruments and credit assurance requirements, including collateral, in support of ~~the Company's~~our midstream service contracts, joint venture arrangements or construction contracts. Margin deposits on ~~the Company's~~our OTC derivative instruments are also subject to factors other than credit rating, such as natural gas prices and credit thresholds set forth in the agreements between us and our hedging ~~counterparties and the Company.~~ counterparties.

As of ~~July 22, 2020, the Company~~April 30, 2021, we had sufficient unused borrowing capacity, net of letters of credit, under ~~its~~our credit facility to satisfy any requests for margin deposit or other collateral that ~~its~~our counterparties are permitted to request of ~~the Company~~us pursuant to ~~the Company's~~our OTC derivative instruments, midstream services contracts and other contracts. As of ~~July 22, 2020,~~April 30, 2021, such assurances could be up to approximately $1.1 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.9 billion in the aggregate. See Notes 3 and 6tothe Condensed Consolidated Financial Statements for further information.

~~The Company's~~Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under ~~the Company's~~our credit facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions. The most significant covenants and events of default under the debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. ~~The Company's~~Our credit facility contains financial covenants that require ~~the Company~~us to have a total ~~debt-to-total~~debt to total capitalization ratio no greater than 65%. The calculation of this ratio excludes the effects of accumulated other comprehensive income. As of ~~June 30, 2020, the Company was~~March 31, 2021, we were in compliance with all debt provisions and ~~covenants.~~covenants under our debt agreements.

~~See Note 6 to the Condensed Consolidated Financial Statements for a discussion of the borrowings on the Company's credit facility.~~

~~Table of Contents~~

~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Commodity Risk Management

The substantial majority of ~~the Company's~~our commodity risk management program is related to hedging sales of ~~the Company's~~our produced natural gas. The overall objective of ~~the Company's~~our hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

The derivative commodity instruments ~~used by the Company~~that we use are primarily swap, collar and option agreements. The following table summarizes the approximate volumes and prices of ~~the Company's~~our NYMEX hedge positions through 2024 as of ~~July 22, 2020.~~April 30, 2021.


		2020 (a)		2021		2022		2023		2024			2021 (a)		2022		2023		2024
Swaps:	Swaps:											Swaps:
Volume (MMDth)	Volume (MMDth)	575		467		—		2		2		Volume (MMDth)	863		618		115		2
Average Price ($/Dth)	Average Price ($/Dth)	$	2.74	$	2.50	$	—	$	2.67	$	2.67	Average Price ($/Dth)	$	2.73	$	2.67	$	2.51	$	2.67
Calls – Net Short:	Calls – Net Short:											Calls – Net Short:
Volume (MMDth)	Volume (MMDth)	200		219		284		77		15		Volume (MMDth)	269		284		77		15
Average Short Strike Price ($/Dth)	Average Short Strike Price ($/Dth)	$	2.91	$	2.90	$	2.89	$	2.89	$	3.11	Average Short Strike Price ($/Dth)	$	2.92	$	2.89	$	2.89	$	3.11
Puts – Net Long:	Puts – Net Long:											Puts – Net Long:
Volume (MMDth)	Volume (MMDth)	69		57		135		69		15		Volume (MMDth)	158		135		69		15
Average Long Strike Price ($/Dth)	Average Long Strike Price ($/Dth)	$	2.29	$	2.38	$	2.35	$	2.40	$	2.45	Average Long Strike Price ($/Dth)	$	2.59	$	2.35	$	2.40	$	2.45
Fixed Price Sales (b):	Fixed Price Sales (b):											Fixed Price Sales (b):
Volume (MMDth)	Volume (MMDth)	5		72		3		3		—		Volume (MMDth)	54		4		3		—
Average Price ($/Dth)	Average Price ($/Dth)	$	2.66	$	2.50	$	2.52	$	2.38	$	—	Average Price ($/Dth)	$	2.49	$	2.38	$	2.38	$	—

(a)~~July~~April 1 through December 31.

(b)The difference between the fixed price and NYMEX price is included in average differential presented in ~~the Company's~~our price reconciliation in "Average Realized Price Reconciliation." The fixed price natural gas sales agreements can be physically or financially settled.

For ~~2020 (July~~2021 (April 1 through December 31), ~~2021,~~ 2022, 2023 and 2024, ~~the Company has~~we have natural gas sales agreements for approximately ~~6 MMDth, 18~~14 MMDth, 18 MMDth, 88 MMDth and 11 MMDth, respectively, that include average NYMEX ceiling prices of ~~$3.60,~~ $3.17, $3.17, $2.84 and $3.21, respectively. ~~The Company has~~We have also entered into derivative instruments to hedge basis. ~~The Company~~We may use other contractual agreements to implement ~~its~~our commodity hedging ~~strategy.~~

~~During the three months ended June 30, 2020, the Company purchased $54 million of options with the primary purpose of reducing future NYMEX based payments that could be due in 2021, 2022 and 2023~~strategy from time to ~~Equitrans Midstream related to the Henry Hub Cash Bonus (defined and discussed in Note 9 to the Condensed Consolidated Financial Statements) provided for by the Consolidated GGA.~~time.

See Item 3., "Quantitative and Qualitative Disclosures About Market Risk" and Note 3 to the Condensed Consolidated Financial Statements for further discussion of ~~the Company's~~our hedging program.

~~Off-Balance Sheet Arrangements~~

~~See Note 17 to the Consolidated Financial Statements in the Company's Annual Report on~~ ~~Form 10-K~~ ~~for the year ended December 31, 2019 for a discussion of the Company's guarantees.~~

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

~~Schedule of Contractual Obligations~~

~~The following table presents the Company's long-term contractual obligations as of June 30, 2020.~~

Total 2020 (a) 2021 – 2022 2023 – 2024 Thereafter
(Thousands)
Purchase obligations (b) $ 25,750,101 $ 1,037,039 $ 3,469,023 $ 3,867,661 $ 17,376,378
Long-term debt, including current portion 4,763,185 13,737 1,030,129 22,083 3,697,236
Interest payments on debt (c) 1,566,363 124,760 485,589 431,659 524,355
Credit facility borrowings (d) 38,000 — 38,000 — —
Lease obligations (e) 49,101 15,248 18,570 15,255 28
Other liabilities (f) 32,668 965 17,403 8,781 5,519
Total contractual obligations $ 32,199,418 $ 1,191,749 $ 5,058,714 $ 4,345,439 $ 21,603,516

~~(a)July 1 through December 31.~~

~~(b)~~Purchase obligations are primarily commitments for demand charges under existing long-term contracts and binding precedent agreements with various pipelines, some of which extend up to 20 years or longer. The Company has entered into agreements to release some of its capacity. Purchase obligations also include commitments for processing capacity in order to extract heavier liquid hydrocarbons from the natural gas stream.

~~(c)Interest payments exclude interest related to the Company's credit facility borrowings as the interest rate is variable.~~

~~(d)The Company's credit facility borrowings were classified based on the credit facility's termination date.~~

~~(e)See Note 15 to the Consolidated Financial Statements in the Company's Annual Report on~~ ~~Form 10-K~~ ~~for the year ended December 31, 2019 for a discussion of the Company's lease obligations.~~

~~(f)~~Other liabilities are primarily commitments for estimated payouts for various liability stock award plans. See "Critical Accounting Policies and Estimates" herein, Note 11 to the Condensed Consolidated Financial Statements and Note 13 to the Consolidated Financial Statements in the Company's Annual Report on ~~Form 10-K~~ ~~for the year ended December 31, 2019 for a discussion of factors that affect the ultimate amount of the payout of these obligations.~~

The Company is currently unable to make reasonably reliable estimates of the period of cash settlement of potential liabilities with taxing authorities related to its total reserve for unrecognized tax benefits; therefore, this amount has been excluded from the schedule of contractual obligations.

Commitments and Contingencies

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against ~~the Company.~~us. While the amounts claimed may be substantial, ~~the Company is~~we are unable to predict with certainty the ultimate outcome of such claims and proceedings. ~~The Company accrues~~We accrue legal and other direct costs related to loss contingencies when actually incurred. ~~The Company has~~We have established reserves ~~it believes~~that we believe to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, ~~the Company believes~~we believe that the ultimate outcome of any matter currently pending against ~~the Company~~us will not materially affect ~~the Company's~~our financial condition, results of operations or liquidity. See Note 16 to the Consolidated Financial Statements and Part I, Item 3., "Legal Proceedings" in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for a discussion of ~~the Company's~~our commitments and contingencies. ~~See also Part II, Item 1., "Legal Proceedings."~~

Recently Issued Accounting Standards

~~The Company's~~Our recently issued accounting standards are described in Note 1 to the Condensed Consolidated Financial Statements.

Critical Accounting Policies and Estimates

~~The Company's significant~~Our critical accounting policies, including a discussion regarding the estimation uncertainty and the impact that our critical accounting estimates have had, or are reasonably likely to have, on our financial condition or results of operations, are described in Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations" in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been~~

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~~EQT Corporation and Subsidiaries~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

~~included in the notes to the Condensed Consolidated Financial Statements.~~2020. The application of ~~the Company's~~our critical accounting policies may require ~~management~~us to make judgments and estimates about the amounts reflected in the Condensed Consolidated Financial Statements. ~~Management uses~~We use historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

~~See Note 5 for a discussion~~

Table of ~~the CARES Act, including its expected impact on the Company's methodologies, financial statements and related disclosures.~~Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk and Derivative ~~Instruments~~

Instruments.

~~The Company's~~Our primary market risk exposure is the volatility of future prices for natural gas and NGLs. Due to the volatility of commodity prices, ~~the Company is~~we are unable to predict future potential movements in the market prices for natural gas and NGLs at ~~the Company's~~our ultimate sales points and, thus, cannot predict the ultimate impact of prices on ~~its~~our operations. Prolonged low, or significant, extended declines in, natural gas and NGLs prices could adversely affect, among other things, ~~the Company's~~our development plans, which would decrease the pace of development and the level of ~~the Company's~~our proved reserves. Increases in natural gas and NGLs prices may be accompanied by, or result in, increased well drilling costs, increased production taxes, increased lease operating expenses, increased volatility in seasonal gas price spreads for ~~the Company's~~our storage assets and increased end-user conservation or conversion to alternative fuels. In addition, to the extent ~~the Company has~~we have hedged ~~its~~our production at prices below the current market price, ~~the Company~~we will not benefit fully from ~~any~~an increase in the price of natural gas.

The overall objective of ~~the Company's~~our hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices. ~~The Company's~~Our use of derivatives is further described in Note 3 to the Condensed Consolidated Financial Statements and "Commodity Risk Management" under "Capital Resources and Liquidity" in Item 2., "Management's Discussion and Analysis of Financial Condition and Results of Operations." ~~The Company's over the counter (OTC)~~Our OTC derivative commodity instruments are placed primarily with financial institutions and the creditworthiness of those institutions is regularly monitored. ~~The Company~~We primarily ~~enters~~enter into derivative instruments to hedge forecasted sales of production. ~~The Company~~We also ~~enters~~enter into derivative instruments to hedge ~~basis and exposure to fluctuations in interest rates. The Company's~~basis. Our use of derivative instruments is implemented under a set of policies approved by ~~the Company's~~our management-level Hedge and Financial Risk Committee and is reviewed by ~~the Company's~~our Board of Directors.

For derivative commodity instruments used to hedge ~~the Company's~~our forecasted sales of production, which are at, for the most part, NYMEX natural gas prices, ~~the Company sets~~we set policy limits relative to the expected production and sales levels that are exposed to price risk. ~~The Company has~~We have an insignificant amount of financial natural gas derivative commodity instruments for trading purposes.

The derivative commodity instruments ~~used by the Company~~we use are primarily swap, collar and option agreements. These agreements may require payments to, or receipt of payments from, counterparties based on the differential between two prices for the commodity. ~~The Company uses~~We use these agreements to hedge ~~its~~our NYMEX and basis exposure. ~~The Company~~We may also use other contractual agreements when executing ~~its~~our commodity hedging strategy.

~~The Company monitors~~We monitor price and production levels on a continuous basis and ~~makes~~make adjustments to quantities hedged as warranted.

A hypothetical decrease of 10% in the market price of natural gas ~~from June 30, 2020~~on March 31, 2021 and December 31, ~~2019~~2020 would increase the fair value of ~~the Company's~~our natural gas derivative commodity instruments by approximately ~~$347.8~~$473 million and ~~$389.4~~$501 million, respectively. A hypothetical increase of 10% in the market price of natural gas ~~from June 30, 2020~~on March 31, 2021 and December 31, ~~2019~~2020 would decrease the fair value of ~~the Company's~~our natural gas derivative commodity instruments by approximately ~~$346.9~~$469 million and ~~$394.5~~$495 million, respectively. For purposes of this analysis, ~~the Company~~we applied the 10% change in the market price of natural gas ~~from June 30, 2020~~on March 31, 2021 and December 31, ~~2019~~2020 to ~~the Company's~~our natural gas derivative commodity instruments as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 to calculate the hypothetical change in fair value. The change in fair value was determined using a method similar to ~~the Company's~~our normal process for determining derivative commodity instrument fair value described in Note 4 to the Condensed Consolidated Financial Statements.

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The above analysis of ~~the Company's~~our derivative commodity instruments does not include the offsetting impact that the same hypothetical price movement may have on ~~the Company's~~our physical sales of natural gas. The portfolio of derivative commodity instruments held to hedge ~~the Company's~~our forecasted produced gas approximates a portion of ~~the Company's~~our expected physical sales of natural gas; therefore, an adverse impact to the fair value of the portfolio of derivative commodity instruments held to hedge ~~the Company's~~our forecasted production associated with the hypothetical changes in commodity prices referenced above should be offset by a favorable impact on ~~the Company's~~our physical sales of natural gas, assuming that the derivative commodity instruments are not closed in advance of their expected term and the derivative commodity instruments continue to function effectively as hedges of the underlying risk.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or maturity date, whichever comes first.

Interest Rate ~~Risk~~

Risk.

Changes in market interest rates affect the amount of interest ~~the Company earns~~we earn on cash, cash equivalents and short-term investments and the interest ~~rates the Company pays~~rate we pay on borrowings ~~on its~~under our credit ~~facility and, prior its full redemption on June 30, 2020, term loan~~ facility. None of the interest ~~the Company pays~~we pay on ~~its~~our senior notes fluctuate based on changes to market interest rates. A 1% increase in interest rates on the ~~Company's~~ borrowings ~~on its~~under our credit ~~facility and term loan~~ facility during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 would have increased interest expense by approximately $8$5 million.

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Interest rates on ~~the Adjustable Rate Notes~~our senior notes fluctuate based on changes to the credit ratings assigned to ~~the Company's~~our senior notes by Moody's, S&P and Fitch. For a discussion of credit rating downgrade risk, see Item 1A., "Risk Factors – Our exploration and production operations have substantial capital requirements, and we may not be able to obtain needed capital or financing on satisfactory terms" in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019. See also Item 1A., "Risk Factors" in this Quarterly Report on Form 10-Q.~~2020. Changes in interest rates affect the fair value of ~~the Company's~~our fixed rate debt. See Note 6 to the Condensed Consolidated Financial Statements for further discussion of ~~the Company's~~our debt and Note 4 to the Condensed Consolidated Financial Statements for a discussion of fair value measurements, including the fair value of ~~the Company's~~our debt.

Other Market ~~Risks~~

Risks.

~~The Company is~~We are exposed to credit loss in the event of nonperformance by counterparties to ~~its~~our derivative contracts. This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. ~~The Company's~~Our OTC derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as the financial industry as a whole. ~~The Company uses~~We use various processes and analyses to monitor and evaluate ~~its~~our credit risk exposures, including monitoring current market conditions and counterparty credit fundamentals. Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, ~~the Company enters~~we enter into transactions primarily with financial counterparties that are of investment grade, ~~enters~~enter into netting agreements whenever possible and may obtain collateral or other security.

Approximately ~~60%~~41%, or ~~$781.6~~$367 million, of ~~the Company's~~our OTC derivative contracts outstanding at ~~June 30, 2020~~March 31, 2021 had a positive fair value. Approximately ~~75%~~47%, or ~~$718.0~~$456 million, of ~~the Company's~~our OTC derivative contracts outstanding at December 31, ~~2019~~2020 had a positive fair value.

As of ~~June 30, 2020, the Company was~~March 31, 2021, we were not in default under any derivative contracts and had no knowledge of default by any counterparty to ~~its~~our derivative contracts. During the three months ended ~~June 30, 2020, the Company~~March 31, 2021, we made no adjustments to the fair value of ~~its~~our derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in ~~the Company's~~our established fair value procedure. ~~The Company monitors~~We monitor market conditions that may impact the fair value of ~~its~~our derivative contracts.

~~The Company is~~We are exposed to the risk of nonperformance by credit customers on physical sales of natural gas, NGLs and oil. Revenues and related accounts receivable from ~~the Company's~~our operations are generated primarily from the sale of produced natural gas, NGLs and oil to marketers, utilities and industrial customers located in the Appalachian Basin and in markets that are accessible through ~~the Company's~~our transportation portfolio, which includes markets in the Gulf Coast, Midwest and Northeast United States and Canada. ~~The Company~~We also ~~contracts~~contract with certain processors to market a portion of NGLs on ~~behalf of the Company.~~

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our behalf.

No one lender of the large group of financial institutions in the syndicate for ~~the Company's~~our credit facility holds more than 10% of the financial commitments under such facility. The large syndicate group and relatively low percentage of participation by each lender are expected to limit ~~the Company's~~our exposure to disruption or consolidation in the banking industry.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including ~~the Company's~~our Principal Executive Officer and Principal Financial Officer, an evaluation of ~~the Company's~~our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), was conducted as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that ~~the Company's~~our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the first quarter of 2021, we completed the implementation of an enterprise resource planning (ERP) system, and revised and updated the related controls. As a result of the implementation, there were certain changes to processes and procedures, which resulted in changes to our internal control over financial reporting. The ERP implementation is expected to strengthen our financial controls by automating certain manual processes and standardizing business processes and reporting across the organization. We will continue to evaluate and monitor the internal controls over financial reporting and will continue to evaluate the operating effectiveness of related key controls.

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There were no other changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the ~~second~~first quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, ~~the Company's~~our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against ~~the Company.~~us. While the amounts claimed may be substantial, ~~the Company is~~we are unable to predict with certainty the ultimate outcome of such claims and proceedings. ~~The Company accrues~~We accrue legal and other direct costs related to loss contingencies when actually incurred. ~~The Company has~~We have established reserves ~~it believes~~in amounts that we believe to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, ~~the Company believes~~we believe that the ultimate outcome of any matter currently pending against ~~the Company~~us will not materially affect ~~the~~our financial condition, results of operations or ~~liquidity of the Company.~~liquidity.

~~Secondary Containment underneath Gas Processing Units (GPUs), Allegheny, Greene and Washington Counties, Pennsylvania~~West Virginia Air Quality Permit Violations, Wetzel County, West Virginia. .

~~On April 1, 2020,~~In mid-March 2021, we discovered that a small subset of nine of our well pads located in Wetzel County, West Virginia (collectively known as the ~~Company received~~Stone pads) were out of compliance with the air quality permits and/or permit determinations originally obtained for the well pads. The Stone pads were permitted to utilize a ~~draft Consent Order and Agreement~~pipeline to transport condensate generated from the ~~Pennsylvania~~associated wells on the pads. Beginning in late 2019, we began storing condensate generated from the associated wells in production tanks located on the Stone pads and trucking the condensate off site, as opposed to utilizing a pipeline for transportation. This change in procedure resulted in higher emissions being generated on site. In March 2021, we self-disclosed this information to the West Virginia Department of Environmental Protection ~~(PADEP) claiming~~(WVDEP) and took corrective actions to ensure that the Company failed to install secondary containment systems in accordance with 25 Pa. Code § 78a.64a(b) underneath 228 GPUs located in southwest Pennsylvania between October 8, 2016 and February 4, 2019. On February 4, 2019, the Company voluntarily disclosed a list of GPUs that did not meet the requirements of 25 Pa. Code § 78a.64a(b) and agreed to begin installing secondary containment systemsStone pads are in compliance with ~~25 Pa. Code § 78a.64a(b) on all new GPU installations going forward. The draft Consent Order and Agreement, which has not been executed by~~their requisite permits. On April 21, 2021, the ~~Company, requires the Company~~WVDEP requested additional information from us related to ~~pay a civil penalty and continue to install such containment systems, among other things. The Company is in the process of negotiating a resolution of~~ this matter, ~~with PADEP.~~and we responded to their requests on April 30, 2021. While ~~the Company anticipates~~we believe that there is a reasonable possibility that the penalties related to this matter ~~are likely to~~may exceed ~~$100,000, the Company expects~~$300,000, we expect that the resolution of this matter will not have a material impact on ~~the~~our financial condition, results of operations or ~~liquidity~~liquidity.

See also “Commitments and Contingencies” under Part I, Item 2. “Management's Discussion and Analysis of ~~the Company.~~Financial Condition and Results of Operations.”

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Item ~~1A.,~~1A, "Risk Factors" ~~in the Company's Annual Report on~~ ~~Form 10-K~~ ~~for the year ended December 31, 2019 other than those listed in this section.~~

~~The outbreak~~ of the novel coronavirus, or COVID-19, has affected and may materially adversely affect, and any future outbreak of any other highly infectious or contagious diseases may materially adversely affect, our operations, financial performance and condition, operating results and cash flows.

The recent outbreak of COVID-19 has affected, and may materially adversely affect, our business and financial and operating results. The severity, magnitude and duration of the current COVID-19 outbreak is uncertain, rapidly changing and hard to predict. Thus far in 2020, the outbreak has significantly impacted economic activity and markets around the world, and COVID-19 or another similar outbreak could negatively impact our business in numerous ways, including, but not limited to, the following:

•our revenue may be reduced if, as many experts predict, the outbreak results in an economic downturn or recession that leads to a prolonged decrease in the demand for natural gas and, to a lesser extent, NGLs and oil;

•our operations may be disrupted or impaired (thus lowering our production level), if a significant portion of our employees or contractors are unable to work due to illness or if our field operations are suspended or temporarily shut-down or restricted due to control measures designed to contain the outbreak;

•the operations of our midstream service providers, on whom we rely for the transmission, gathering and processing of a significant portion of our produced natural gas, NGLs and oil, may be disrupted or suspended in response to containing the outbreak, and/or the difficult economic environment may lead to the bankruptcy or closing of the facilities and infrastructure of our midstream service providers, which may result in substantial discounts in the prices we receive for our produced natural gas, NGLs and oil or result in the shut-in of producing wells or the delay or discontinuance of development plans for our properties; and

•the disruption and instability in the financial markets and the uncertainty in the general business environment may affect our ability to find attractive asset monetization opportunities and successfully execute our plan to deleverage our business within our anticipated timeframe or at all; for example, the market value of the assets to be monetized may be reduced and the financial condition or prospects of prospective purchasers and other counterparties, and such parties'

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access to financing on acceptable terms, may be adversely affected. If we are not able to successfully execute our Deleveraging Plan or otherwise reduce absolute debt to a level we believe appropriate, our credit ratings may be lowered, we may reduce or delay our planned capital expenditures or investments and we may revise or delay our strategic plans.

Prior to the declaration of COVID-19 as a global pandemic by the World Health Organization on March 15, 2020, we established a COVID-19 Response Team (the Response Team) consisting of a multi-disciplinary group of senior leaders. The primary functions of the Response Team are to analyze areas of risk, scenario plan and assess business continuity matters. The Response Team meets regularly and has been in consistent communication with our Board of Directors. We expect that the principal areas of operational risk for us are availability of service providers and supply chain disruption. Active development operations, including drilling and fracking operations, represent the greatest risk for transmission given the number of personnel and contractors on site. While we believe that we are following best practices under COVID-19 guidance, the potential for transmission still exists. In certain instances, it may be necessary or determined advisable for us to delay development operations. The Response Team continues to monitor potential areas of risk for us.

In addition, the COVID-19 pandemic has increased volatility and caused negative pressure in the capital and credit markets. As a result, we may experience difficulty accessing the capital or financing needed to fund our exploration and production operations, which have substantial capital requirements, or refinance our upcoming maturities on satisfactory terms or at all. We typically fund our capital expenditures with existing cash and cash generated by operations (which is subject to a number of variables, including many beyond our control) and, to the extent our capital expenditures exceed our cash resources, from borrowings under our revolving credit facility and other external sources of capital. If our cash flows from operations or the borrowing capacity under our revolving credit facility are insufficient to fund our capital expenditures and we are unable to obtain the capital necessary for our planned capital budget or our operations, we could be required to curtail our operations and the development of our properties, which in turn could lead to a decline in our reserves and production, and could adversely affect our business, results of operations and financial position.

As of December 31, 2019, our senior notes were rated "Baa3" by Moody's, "BBB–" by S&P and "BBB–" by Fitch, each with a "Negative" outlook. In January 2020, Moody's downgraded our senior notes credit rating to "Ba1." In February 2020, S&P downgraded our senior notes credit rating to "BB+," and Fitch downgraded our senior notes credit rating to "BB." In April 2020, S&P further downgraded our senior notes credit rating to "BB–," and Moody's further downgraded our senior notes credit rating to "Ba3." In June 2020, Fitch revised our outlook to "Positive." As a result of the February 2020 and April 2020 downgrades, the interest rate on our 6.125% senior notes will increase to 7.875% and the interest rate on our 7.000% senior notes will increase to 8.750% beginning with the interest payment period that starts on August 1, 2020. Although we are not aware of any current plans of Moody's, S&P or Fitch to further downgrade its rating of our senior notes, we cannot be assured that one or more will not further downgrade or withdraw entirely their rating of our senior notes. Further impacts to our business as a result of the recent outbreak of COVID-19, including low prices for natural gas, NGLs and oil, or an increase in the level of our indebtedness or failure to significantly execute the Deleveraging Plan, may result in Moody's, S&P or Fitch further downgrading its rating of our senior notes. If there are further downgrades to our credit rating, our access to the capital markets may be impacted, the cost of short-term debt through interest rates and fees under our lines of credit may increase, the interest rate on our Adjustable Rate Notes will further increase, the rates available on new long-term debt may increase, our pool of investors and funding sources may decrease, the borrowing costs and margin deposit requirements on our derivative instruments may increase and we may be required to provide additional credit assurances, including collateral, in support of our midstream service contracts, joint venture arrangements or construction contracts, which could adversely affect our business, results of operations and liquidity. As of July 22, 2020, we had sufficient unused borrowing capacity, net of letters of credit, under our credit facility to satisfy any requests for margin deposit or other collateral that our counterparties are permitted to request of us pursuant to our derivative instruments, midstream services contracts and other contracts. As of July 22, 2020, such assurances could be up to approximately $1.1 billion, inclusive of letters of credit, margin deposits and other collateral posted of approximately $0.9 billion in the aggregate.

~~To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in Item 1A., "Risk Factors" in~~ our Annual Report on Form 10-K for the year ended December 31, 2019, such as those relating to our financial performance and debt obligations. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on our business, which will depend on numerous evolving factors and future developments that we are not able to predict, including the length of time that the pandemic continues, its effect on the demand for natural gas, NGLs and oil, the response of the overall economy and the financial markets as well as the effect of governmental actions taken in response to the pandemic.2020.

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~~The accounting for the Convertible Notes may have a material effect on our reported financial results.~~

On April 28, 2020, we issued the Convertible Notes due May 1, 2026 unless earlier redeemed, repurchased or converted. In accordance with GAAP, an issuer must separately account for the liability and equity components of certain convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer's economic interest cost. The effect on the accounting for the Convertible Notes is that the equity component is required to be included in additional paid-in capital of shareholders' equity on our condensed consolidated balance sheet, and the value of the equity component is treated as a debt discount for purposes of accounting for the debt component of the Convertible Notes. As a result, we will be required to record a greater amount of non-cash interest expense in current and future periods as a result of the amortization of the discounted carrying value of the Convertible Notes to their face amount over the term of the Convertible Notes. We will report lower net income (or greater net loss) in our financial results because GAAP requires interest to include both the current period's amortization of the debt discount and the instrument's coupon interest, which could adversely affect our reported or future financial results, the market price of our common stock and the trading price of the Convertible Notes.

In addition, because we have the ability and intent to settle the Convertible Notes, upon conversion, by paying or delivering cash equal to the principal amount of the obligation and common stock for amounts over the principal amount, the shares issuable upon conversion of the Convertible Notes are accounted for using the treasury stock method and, as such, are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Convertible Notes exceeds their principal amount. Further, under the treasury stock method, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess are issued. We cannot be sure that we will be able to continue to demonstrate the ability or intent to settle in cash or that the accounting standards will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the Convertible Notes, our diluted earnings per share could be adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~The Company~~We did not repurchase any equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, during the three months ended ~~June 30, 2020.~~March 31, 2021.

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Item 6. Exhibits

Exhibit No.

Description

Method of Filing

3.01(a)

Restated Articles of Incorporation of EQT Corporation (as amended through November 13, 2017).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on November 14, 2017.

3.01(b)

Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective May 1, 2020).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on May 4, 2020.

3.01(c)

Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective July 23, 2020).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on July 23, 2020.

3.02

Amended and Restated Bylaws of EQT Corporation (as amended through May 1, 2020).

Incorporated herein by reference to Exhibit 3.4 to Form 8-K (#001-3551) filed on May 4, 2020.

~~4.01~~*10.01(a)

~~Indenture,~~Letter Agreement (Wherry), dated ~~as of April 28, 2020, between~~February 2, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and ~~The Bank of New York Mellon,~~EQM Gathering OpCo, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as ~~trustee, pursuant to which the 1.75% Convertible Senior Notes due 2026 were issued.~~amended.

~~Incorporated herein by reference to~~Filed herewith as Exhibit ~~4.1 to Form 8-K (#001-3551) filed on April 29, 2020.~~10.01(a).

*~~10.01~~10.01(b)

~~Form of~~Letter Agreement (Ealy), dated February 3, 2021, among EQT Corporation, ~~Short-Term Incentive Plan.~~EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

~~Incorporated herein by reference to~~Filed herewith as Exhibit ~~10.1 to Form 8-K (#001-3551) filed on May 4, 2020.~~10.01(b).

*10.01(c)

Letter Agreement (Oxford 43), dated February 9, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, and acknowledged and agreed to by Rice Drilling D LLC and EQM Olympus Midstream, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

Filed herewith as Exhibit 10.01(c).

*10.01(d)

Letter Agreement (JT Farms), dated February 23, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

Filed herewith as Exhibit 10.01(d).

10.02

~~EQT Corporation 2020 Long-Term Incentive Plan.~~

~~Incorporated herein by reference~~Extension Agreement and First Amendment to ~~Exhibit 99.1 to Form S-8 (#333-237953) filed on May 1, 2020.~~

*10.03

~~EQT Corporation Executive Severance Plan.~~

~~Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on May 20, 2020.~~

~~10.04~~

~~Purchase~~Second Amended and Restated Credit Agreement, dated as of April 23, ~~2020, by and~~2021, among EQT Corporation, PNC Bank, National Association, as administrative agent, and ~~J.P. Morgan Securities LLC, Barclays Capital Inc. and Credit Suisse Securities (USA) LLC, as representative of the several initial purchasers named in Schedule 1 attached~~each lender party thereto.

Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on April ~~29, 2020.~~

~~10.05~~

~~Form of Capped Call Confirmation.~~

~~Incorporated herein by reference to Exhibit 10.2 to Form 8-K (#001-3551) filed on April 29, 2020.~~26, 2021.

31.01

Rule 13(a)-14(a) Certification of Principal Executive Officer.

Filed herewith as Exhibit 31.01.

31.02

Rule 13(a)-14(a) Certification of Principal Financial Officer.

Filed herewith as Exhibit 31.02.

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.

Furnished herewith as Exhibit 32.

101

Interactive Data File.

Filed herewith as Exhibit 101.

104

Cover Page Interactive Data File.

Formatted as Inline XBRL and contained in Exhibit 101.

~~Each management contract and compensatory arrangement~~*Certain terms in ~~which any director or any named executive officer participates has~~this exhibit have been ~~marked~~redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. A copy of the unredacted exhibit will be furnished to the SEC upon request. Omissions are designated with ~~an asterisk (*).~~brackets containing asterisks.

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Table of Contents

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.


						EQT CORPORATION
						(Registrant)


			By:			/s/ David M. Khani
						David M. Khani
						Chief Financial Officer

Date: ~~July 27, 2020~~May 6, 2021

4131


	Common Stock									Accumulated Other Comprehensive Loss
	Shares	No Par Value		Treasury Stock		Retained Earnings						Total Equity
	(Thousands, except per share amounts)
Balance at April 1, 2019	254,999	$	7,817,227	$	(39,665)	$	3,367,810	$	(5,784)	$	11,139,588
Comprehensive income, net of tax:
Net income						125,566				125,566
Net change in interest rate cash flow hedges, net of tax expense: $10								42		42
Other postretirement benefits liability adjustment, net of tax expense: $26								76		76
Dividends ($0.03 per share)						(7,665)				(7,665)
Share-based compensation plans	19	4,983		355						5,338
Other	(222)	(14,470)								(14,470)
Balance at June 30, 2019	254,796	$	7,807,740	$	(39,310)	$	3,485,711	$	(5,666)	$	11,248,475

Balance at April 1, 2020	255,262	$	7,821,631	$	(30,852)	$	1,848,286	$	(5,187)	$	9,633,878
Comprehensive loss, net of tax:
Net loss						(263,075)				(263,075)
Other postretirement benefits liability adjustment, net of tax expense: $24								72		72
Share-based compensation plans	28	3,796		511						4,307
Equity component of convertible senior notes (See Note 6)		63,645								63,645
Balance at June 30, 2020	255,290	$	7,889,072	$	(30,341)	$	1,585,211	$	(5,115)	$	9,438,827


	Interest rate cash flow hedges, net of tax			Other postretirement benefits liability adjustment, net of tax			Accumulated OCI (loss), net of tax
	(Thousands)

April 1, 2019	$	(345)		$	(5,439)		$	(5,784)
Losses reclassified from accumulated OCI, net of tax	42		(a)	76		(b)	118
June 30, 2019	$	(303)		$	(5,363)		$	(5,666)

April 1, 2020	$	—		$	(5,187)		$	(5,187)
Losses reclassified from accumulated OCI, net of tax	—			72		(b)	72
June 30, 2020	$	—		$	(5,115)		$	(5,115)

January 1, 2019	$	(387)		$	(5,019)		$	(5,406)
Losses reclassified from accumulated OCI, net of tax	84		(a)	152		(b)	236
Change in accounting principle	—			(496)		(c)	(496)
June 30, 2019	$	(303)		$	(5,363)		$	(5,666)

January 1, 2020	$	—		$	(5,199)		$	(5,199)
Losses reclassified from accumulated OCI, net of tax	—			84		(b)	84
June 30, 2020	$	—		$	(5,115)		$	(5,115)


	Total		2020 (a)		2021 – 2022		2023 – 2024		Thereafter
	(Thousands)
Purchase obligations (b)	$	25,750,101	$	1,037,039	$	3,469,023	$	3,867,661	$	17,376,378
Long-term debt, including current portion	4,763,185		13,737		1,030,129		22,083		3,697,236
Interest payments on debt (c)	1,566,363		124,760		485,589		431,659		524,355
Credit facility borrowings (d)	38,000		—		38,000		—		—
Lease obligations (e)	49,101		15,248		18,570		15,255		28
Other liabilities (f)	32,668		965		17,403		8,781		5,519
Total contractual obligations	$	32,199,418	$	1,191,749	$	5,058,714	$	4,345,439	$	21,603,516